The secret to Life Insurance companies is really no big secret at all. Take in more money than you pay out! That’s the bottom line in any business. Life insurance is no different in this regard. You might wonder if that has to do with complicated algorithms, laborious calculations or some fancy number-crunching from an experienced professional. Take a look at their product and you will see that it is just simple math.
Any insurance salesman will try to sell you any product that he can and make it sound like you- quite literally- can’t live without it. Letting your life insurance policy lapse once you reach age 60 can be a costly proposition, so do not let that happen to you.
Accelerated death benefits for those who are terminally ill can be lost. All that cash that could have been available as an early pay out ends up in the company coffers, making your insurance company rich and robbing you of needed care. Any policyholder can give away their life insurance policy by signing a transfer document and notifying the insurance company of the change. Once the policy is transferred, the new owner is responsible for making premium payments, although not all policies qualify for this transfer.
Don’t forget that you can convert any term policy to permanent insurance, prior to the lapse and be afforded more complete coverage, usually at a lower premium. Insurance companies want to stay in business by providing a quality product and paying out when necessary. Let’s face it, though, they are in the business to make your money. You need to make sure to ask questions about anything you don’t understand and do your research. Being an informed consumer is your best asset in any transaction. The big secret they don’t want exposed is that you can actually get affordable and appropriate coverage when you employ all the resources at your disposal.
Since there is no federal regulatory committee for Life insurance, it is governed by the individual state. In 2010, though, the National Council on Life Insurance created its consumer disclosure act. This act requires life insurance companies to provide written notice of alternatives to the lapse or surrender of life insurance policies. This is specifically for those who are 60 or older or who are known by the insurer to be terminally or chronically ill. By taking the time to know all your rights about your policy, you will not fall victim and let your policy lapse.