You might have heard of death benefits of life insurance, but what about the living benefits of life insurance? Is there even a thing such as life insurance Living benefits? In this article, we will do an in-depth analysis of all the living benefits of life insurance.
Living Benefits of Term Insurance
Several years back as a new burial insurance agent, I met a very nice 82-year-old lady. She worked in the cleaners her entire life and was still working 20 hours a week dry cleaning. Her health was great, and all was well. Regarding her burial insurance policy, she had a plan from a very well-known company. Her plan was a term insurance plan. And while this plan did not cancel until she reached 90, the term insurance premium increased annually for the past 12 years. What started off around $50 a month for her term insurance was now $350 a month. Nevertheless, she could afford it since she worked.
How Burial Life Insurance Can Become Unaffordable Overnight Unfortunately, her health took a change for the worse. The doctors recommended open heart surgery to fix a blockage. And since she was 82, the doctor ordered her into retirement. Since she lost her income from her part-time job, she was now in a tough position. Bills had to be paid, and there was no room to afford a $350 term insurance premium.
And to add insult to injury, she could get to replace her term insurance policy with immediate coverage with another burial insurance policy option. Due to her recent open-heart surgery experience, her only option was a 2-year waiting period burial insurance policy (which will discuss in more detail shortly).
This sad story happens daily. People do a good job of having burial insurance policy in place. However, they do not understand how it works. And usually, it is because the final expense burial insurance agent did not explain it. Even worse, the agent may have purposely hidden the facts from them. Now well into retirement, this lady does not have either the means to pay for expensive term life insurance, or the health to qualify for something better. Whatever you do, do not be this person.
Living Benefits of Permanent Insurance
Insurance Policy Options Regarding burial insurance for seniors, the opposite of a term insurance policy is a permanent policy. A permanent burial insurance policy is permanent if you pay the premium. For your whole life, regardless of how long you live, you receive guaranteed coverage to provide a specific death benefit payable to the beneficiary of your choice.
Like myself, burial agents commonly recommend permanent burial insurance for seniors to those looking for final expense coverage. Why? Because the design of the policy matches the reality of the problem. Guarantees in Your Burial Insurance Policy As mentioned earlier, a burial insurance policy that does NOT cover you past a certain age does not do you any good. With a permanent burial insurance policy, if you pay your premium, you have coverage.
Living Benefits of Guaranteed Acceptance Burial Policy
What follows is a breakdown of the different options for permanent coverage. Guaranteed Acceptance Burial Insurance Policy First of all, you have guaranteed acceptance whole life insurance. Guaranteed acceptance insurance means that the policy will be issued under any circumstance, regardless of health.
Beyond age limits, the company cannot decline you. Simply put, if you have a pulse and can sign your name, you are approved. This is a great policy option for people who are otherwise uninsurable, like those with Alzheimer’s, current cancer (those who have been cancer-free for over a year have better options), and kidney dialysis.
As you can imagine, there are drawbacks. Let me explain. A guaranteed issue burial insurance policy provides first-day 100% full coverage for accidental death only. Death caused by natural reasons are not fully covered for minimum of the first 2 years.
Living Benefits of Pre-need Burial Insurance Policy
Pre-need Burial Insurance Policy The first option is pre-need insurance coverage. Pre-need insurance is a burial insurance policy purchased through a funeral home. Pre-need policies are a bit different than burial insurance policies. First, pre-need plans are designed to lock in your rates for all the items associated with your funeral.
Items like your casket, cremation expense, the service itself, etc. are locked in and guaranteed. The policy also is a paid-up policy. This means you pay premiums over 5 to 10 years before paying it off completely. If death occurs prior to you paying the policy off, in most circumstances the policy pays the death benefit to cover the funeral expense of death. With pre-need burial life insurance policies, they act as an insurance policy, but also has the added advantage of combating the inflationary costs of funerals.
Living Benefits of Guaranteed Universal Life
Guaranteed Universal Life for Burial Insurance Are you in good health and interested in burial insurance policy sizes in excess of $25,000 in coverage? Consider a guaranteed universal life insurance policy. The idea behind a guaranteed universal life insurance policy is like a burial insurance whole life plan.
However, the biggest difference is minimal access to cash value. And the reason for this is that a guaranteed universal life plan maximizes the amount of death benefit payable. In return, you see limited cash value access. I only recommend guaranteed universal life insurance if someone is looking for a substantial amount of coverage.
The applicant also needs to be in very good health. Underwriting is a bit tighter, and the client needs to clearly understand the lack of long-term cash value access. Nevertheless, guaranteed universal life insurance plans are great for people who want a large death benefit.