Life insurance policies are commonly regarded as something that will benefit the family of a loved one after they pass away. That is not the only benefit they offer. In fact, many life insurance policyholders may be pleasantly surprised at some of the features they have in place with their current coverage. Evaluate your policy with your agent and find out what hidden gems you have access to in terms of your life insurance coverage.
Some common features of life insurance policies are discussed here.
1. Mortgage Protection Clause
While it is commonly known that a life insurance policy will cover your expenses after you die, many people don’t realize that often term life policies will also pay off your mortgage on top of your payout amount. This is often a significant expense and would otherwise take up most of the payout on a smaller term policy. To make sure your policy has this feature, contact your insurance agent so that you can have it included if it isn’t already on there.
2. Loans and Cash Withdrawals
Loans and cash withdrawals are also available with certain policies. If your policy is set up to accrue equity, it will continue to build cash value with each premium you pay. The longer you pay into your account, the more value it will gain over time. Once a certain percentage of the policy has been reached in terms of equity or amount, you may have the option to borrow against the policy or take out a cash withdrawal. You can choose to pay the money back in monthly payments that are paid along with your premium, or you can choose to add a series of additional payments to the end of the term and maintain your current premium amount. If you fail to pay the loan back, your beneficiaries will receive a reduced death benefit amount.
3. Accelerated or Advanced Death Benefits
Individuals diagnosed with a terminal illness may gain access to a portion of their death benefit before their passing. They can use the money to pay for treatment, their final expenses, or make sure that all of their debts are paid in full before their death. They may want to spend their last days with their family by taking a short trip. Accessing their funds prior to their passing allows them to remain in control of their affairs for as long as possible. This is just one of many features of life insurance policies that the majority of people know nothing about.
Agents at The Schwab Agency can dispel many of the myths that revolve around life insurance. We can also explain all the features of your life insurance policy so that you know exactly what you have covered. Call us and talk to an agent today!