Life Insurance Options That Go Unnoticed

Posted on: 30 November 2017

Especially during major economic woes, many people try to slim down their insurance policies as much as possible. To safe money while cutting out the most unnecessary options is the way of not just life insurance shopping, but auto insurance, health insurance, and other services that are either required or too expensive to not have. Whether you're trying to cut costs or not sure what is important, consider a few of these features that are often overlooked or specifically taken out.

Accelerated Death Benefit

For people with diagnosed terminal illnesses, the costs of continued care can be difficult to manage. By adding an accelerate death benefit option to your life insurance plan, you can gain access to parts of your life insurance payout for terminal illness-related care.

In most cases, qualifying for an accelerated death benefit means having a confirmed terminal illness that can be verified by the insurance company. Once approved, you can use the benefit to pay for long-term care, treatment for your condition, or remaining living expenses.

The funds paid out by accidental death benefits will not be paid out to survivors. It takes from the same pool of your final benefit, but it can cover costs that would have otherwise been the responsibility of caregivers.

Accelerated death benefits are usually tax-free, but be sure to confirm the terms and conditions of your insurance for your current state and any state where you plan on taking residency, along with any issues that may arise from foreign care.

Cash Withdrawal And Loan Options

You can borrow against your insurance policy, but this usually means paying into an option ahead of time or locking down a specific rate.

Borrowing against your life insurance policy is not free money. Like most loans with major lenders, there is an interest rate to consider and there are deadlines to meet. You have to pay the money back, and even if the insured policyholder dies before the loan is repaid, that will be money taken away from the final payment.

Borrowing money from your insurance policy is tax-free, but the beneficiary payment upon death is taxed. The outstanding balance is still taxable, meaning that taxes will be paid for a bigger amount than the payout. Depending on how big your loan may be, it could be a few hundred dollars or it could leave your beneficiaries with nothing at all.

Contact a life insurance professional to discuss other options that may be helpful.


Mastering The Art Of Insurance Coverage

As a responsible adult, I feel like it is my personal responsibility to make sure that I provide my family with the financial security they need to enjoy their normal routine. Unfortunately, since you never know what kinds of obstacles are just around the corner, I started focusing on adding the right insurance policies to supplement my life. I wanted to write a website that would help other people to answer their own insurance questions, so I started looking into things. This website is here to help other people with their insurance questions. Check it out for great information that could help you.

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