CEO of Valor Financial.
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The insurance industry is very fickle and competitive. There are so many important nuances to consider, which is why many find choosing and purchasing life insurance to be so confusing and frustrating. In this article, I want to break down three ways in which today's term life insurance is not your grandparents' term life insurance.
In its traditional form, term life insurance offered only a death benefit, which would only help beneficiaries replace a policyholder's income in the event that they pass away. Benefits could also be put toward final expenses, a mortgage, groceries or any other everyday costs.
Many may be unaware that some of today's term life insurance offerings include living benefits. This is because insurance agents and agencies are only allowed to sell within their captive agencies: In many cases, they don't advertise these services because they simply don't provide them.
Term life insurance with living benefits can sometimes be allocated to your family in the event of a loss in employment, certain illnesses or accidents. These can then provide the income needed to help cover medical expenses or other debts incurred.
It's important for leaders and consumers to fully educate themselves when considering whether to invest in any term life insurance. Here are three options today's consumer should research and determine about a potential policy when considering term life insurance offering living benefits.
1. Accelerated Death Benefits
These benefits allow a policyholder to access a portion of their death benefit in the event of a qualifying terminal or chronic illness or injury, with different options based upon severity.
These are sometimes offered with no additional premium. They may be subject to underwriting, and they are not available in every state. The benefit amount is determined at the time of a claim being made for critical illness or critical injury based on the impact on life expectancy. They can be used to help you and your family maintain your lifestyle while you are still living.
2. Return Of Premium
This option allows money to be returned to you so long as you don't pass away during the term, which is why it often comes at a higher premium. These policies can provide the policyholder with options, including whole life policies, and are expected to offer IUL or infinite banking options in the near future.
3. Disability Waiver Of Premium
These living benefits provide policyholders with the option to delay a few of their premium payments in case they become ill from a long-term disability of six months or more.
Considering All Options When Researching Term Life Insurance
Term life policies do not accumulate cash value, as permanent insurance policies do, but they often have many similar elements as permanent policies. They can be affordable options for leaders and consumers to consider, especially with these advancements in living benefits.
I hope this article sheds some light on these options for readers who may not be able to afford permanent life insurance currently but may not be aware of some of these advancements in living benefits within term life insurance. It's indeed important to understand the ways in which yesterday's insurance is not the same as today's.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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