There are two important factors when it comes to purchasing term life insurance:
- Convertibility – the ability to exchange the policy for a longer period of time at the rating the insured received when the policy was initially issued. In layman’s terms, if someone purchases a policy and receives a “preferred non-tobacco” rating and becomes uninsurable due to diabetes, cancer, heart problems, etc., the policyowner can convert the policy at a phenomenal health rating they currently could not qualify for.
- Accelerated Benefit Riders – the ability to accelerate the death benefit of the policy in the event of a terminal, chronic, or critical illness. In layman’s terms, if someone gets cancer, has a heart attack, stroke, kidney failure, major organ transplant, or cannot perform 2 of the 6 activities of daily living, the policyowner has the option to accelerate the death benefit to pay for expenses or go on a trip.
For some reason a lot of people have the misconception that term life insurance is all the same, nothing could be further from the truth. Generally speaking, life insurance companies in the United States are extremely conservative and have a ton of cash in reserves so this is NOT an article about why you should purchase an overpriced policy from name brand life insurance companies who advertise on television. The point of this article is to raise awareness on the two most important features in a term life insurance policy; Convertibility & Accelerated Benefit Riders commonly referred to as “Living Benefits”.
If people had the option of purchasing a brand-new Honda Accord or Tesla for the same price, how many people would choose the Honda? When it comes to term life insurance, people can purchase terrible term life insurance or the best term life insurance for basically the same cost. Here is an example: Company ABC has a term life insurance policy that offers a 1 million 20-year policy for $52 per month and is the rock bottom cheapest term (which of course we can help people purchase). This policy has no convertibility options or accelerated benefit riders. Insurance company XYZ has a term life insurance policy that offers a 1 million 20-year policy for $55 per month and has convertibility as well as accelerated living benefits built into the policy. $3 per month is typically the difference in price between the cheapest term policy and the best term life insurance policy
A lot of times people can perceive the life insurance sales person as being “salesy” or trying to “upsell” and will cut off their nose to spite their face. It is wise to take emotional feelings out of the equation and take the time to understand the terminology inside the contract. Do not assume to know the subject matter of life insurance, get the facts, analyze the differences yourself or work with an experienced independent life insurance agent to make sure you are on the right train of thought for your situation. There is a huge difference between term life insurance policies, please make sure to take the time to do what is best for you and your loved ones. Pacific Insurance Group based out of Bellevue Washington has hundreds of agents who can help you get set up with the right plan. Please read our online reviews from real customers. For more information just give us a call or shoot us an email, we look forward to the opportunity of serving you.