Life insurance, and the decision to buy it, is among the most critical financial decisions that an individual will make in his or her lifetime. That said, most people will purchase a policy without fully understanding all of its various features, meaning that the majority of policyholders are not taking advantage of everything that their products have to offer.
Experts in the life insurance industry have compiled a list of the most frequently overlooked life insurance features. The following are some of the points that made the list:
• Premium waiver – should a policyholder become disabled or seriously ill, this feature will pay the policy’s premium.
• Accelerated death benefit – in the case that the policyholder is diagnosed with a terminal illness, he or she can take out cash advances that are applied against the policy’s death benefit. This feature is often used to help pay for treatment, palliative care, and other services during the short time that they have to live.
• Guaranteed purchase option – this feature allows an individual to buy life insurance coverage beginning at a specific date in the future or starting at a certain life event without the need to provide proof of good health.
• Spouse or child term riders – a policy for life insurance that includes this feature permits a policyholder to also take out coverage for a spouse or dependent child (26 years old or younger). This can often mean discounts to premiums that would not be available if the policies were all purchased separately.
• Long-term care riders – some policies include a feature that allows a policyholder to use his or her benefits to pay for long-term care in exchanged for a lowered life benefit.