Commonly Overlooked Features of Life Insurance Policies

Purchasing life insurance in Valatie, NY is one of the most important financial decisions consumers make. While many people think of it as an essential part of a financial plan, it benefits both the policyholder and their loved ones. It’s also common that policyholders purchase coverage quickly without looking at the features of their plans, and therefore, fail to take advantage of them. Check out the most commonly overlooked features of life insurance plans and why they are important to you as a policyholder.

Features of Life Insurance

  • Waiver of premium – This feature pays a policy’s premium if you become seriously ill or disabled. With this in place, you and your family do not have to worry about the financial aspect of maintaining reliable life insurance. This gives you incredible peace of mind when the unthinkable happens.
  • Accelerated death benefit – This feature allows you to receive cash advances against your policy’s death benefit if you’re diagnosed with a terminal illness. Many policyholders with this benefit use the money to help pay for treatment and other expenses when they only have a short amount of time left.
  • Convertibility of term insurance – In most term life insurance policies, the policy offers convertibility from the original term policy into an individual whole life term. This means you can turn your temporary policy into permanent coverage.
  • Long-term care riders – You can choose to add certain riders to your policy, and this is certainly one of the more popular riders. This allows you to use the benefits of your policy to pay for long-term care in exchange for a reduced life benefit. This can help you when paying for expenses while living.
  • Cash withdrawals and loans – Some insurance policies allow you to withdraw or borrow money, using the policy’s cash value as collateral. Interest rates tend to be relatively low, making it a great option for families. You can also use the cash value of your life insurance policy to pay your premium if you need to stop paying the premiums for a while.

What Are the Different Types of Life Insurance?

  • Term life insurance – This is coverage that you acquire for a set period of time, such as 5, 10 or 20 years. It offers basic coverage at an affordable premium that many families can benefit from. After the term has ended, the surviving policyholder will need to purchase a new policy. If the policyholder dies within the term, it will pay out to the beneficiaries.
  • Whole life insurance – This permanent coverage protects you for your entire life, and you never need to renew it. It will pay out the death benefit regardless of when you pass away. It also accumulates a cash value that can be borrowed against, making it a great option for individuals and families that want the flexibility to access cash during an emergency.

Term life insurance vs. Whole life insurance, which one should you buy?

Here are the differences between the two policies that you should consider before making a choice:

  • Term life insurance is extremely cost-effective as it provides high coverage at a low premium while whole life insurance has a higher premium rate.
  • Premium may remain the same or increase in term life insurance, whereas, in whole life insurance, the premium remains the same throughout the policy’s term.
  • Term life insurance doesn’t provide permanent life coverage, while whole life insurance provides permanent coverage.
  • Term life insurance typically covers 10-30 years, while whole life insurance is lifetime coverage.
  • You cannot withdraw cash value in term life insurance, whereas you can withdraw and take loans in whole life insurance.

How Do I Get Started?

When you are ready to secure the right life insurance for your finances and family, talk to the team at Kneller Insurance Agency today. We are ready to help you get started on your tailored coverage to help your family through the toughest times. We are fully committed to helping you get the protection that you need. As an independent agency, we work for you, getting you the best price and coverage from our many providers.

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