Term Life Insurance and Accidental Death Policies Explained
If you’ve saved all the years in your life for your family, then you may want to think about getting life insurance. It can provide financial protection for your loved ones after you die. And life insurance is a good idea even for people who aren’t sure about their finances. Life insurance provides many benefits. Some of these benefits come from taxes you pay on the death benefits. But other benefits come from the fact that death benefits can be paid as a single lump sum payment when you die.
The reason life insurance companies offer such low premiums for policies that pay out death benefits is that they view risk as part of the natural aging process. In other words, if you’re healthy now, they don’t see risky activities like smoking, drinking, and risky sexual behaviors as major threats to your chances of illness and death. They view all these things as less-than-risky activities.
A life insurance policy, especially one that covers a large number of people, is a very good investment. The premiums paid for this type of policy reflect the expected return you’ll get if you die. As long as the company has enough money to compensate for all the death benefits they’re paying out, you should have no trouble getting this money when you pass away.
There are two basic types of life policies – one is called a guaranteed issue and the other is called a guaranteed renewable. With a guaranteed issue policy, the insurance company will give you a death benefit equal to the amount of cash you’re leaving them at the end of your life. With a guaranteed issue, there’s no need for a medical exam. This means, the premiums will be lower because there’s no need to pay for a medical exam or to determine that you’re actually healthy.
With a level premium level term policy, the company will consider your health and age when determining your premium. If you’re older and have a medical exam, your premiums will go up. If you smoke, you will also see your rates go up. With this type of policy, there is no need to undergo a medical exam. However, there are still some things the company will consider, such as your smoking habits, so it’s important to quit if you want to take advantage of the lower rates.
Both types of life insurance covers death due to medical causes, suicide, and other things. With natural causes, the insurance company makes a payout to your loved ones. This payout is generally tax-free, meaning you won’t owe any taxes on the death benefits. In addition, your loved ones will get the money you have left over. Most policies offer the choice between a fixed payout and a decreasing payout, making it easy for families to make sure they have a small, consistent cash flow within their accounts.
Accidental Death and Intentional Death policies provide two important benefits. The first is an automatic lump sum, called the Exclusions. This is the amount your beneficiary will receive minus the Exclusions, less any applicable fees. The second is additional coverage called the Accidental Death Benefit. With this type of policy, you decide whether or not to increase the payout if your insured dies from an “accidental” cause.
Both types of policies will provide the same basic protection. They both use the word “exclusion,” which means that they will take into account any pre-existing condition. Your insured may have cancer and be treated with a life-saving drug. He or she may have an addiction to a substance and be required to check in to get help. Your beneficiary may receive payments from the policy while he or she is receiving treatment. Your objective in choosing the policy language is to ensure your beneficiaries receive the highest possible compensation and inclusion in your family’s financial plans.