Fear sells many things, and nothing is truer than in the insurance industry. While there are many great life insurance agents, there are some that prey on people and use their fears to sell insurance products. There are many forms of life insurance that many do not need to buy, such as policies for cancer, accidental death, and mortgage death insurance. This is because the payouts on these low-likelihood events are not worth the premiums that you would pay. Plus, these issues are usually factored into your basic life insurance policy anyway.
Cancer Death Insurance
Being diagnosed with cancer can be a very scary experience. Most people can think of a person in their lives that the disease has affected or touched. The life insurance industry has come to the rescue to provide people with a specific life insurance policy to protect against getting a form of the dreaded disease. The insurance policy will pay if you are diagnosed and die of cancer above any traditional life insurance policy that you may own. But, if you own sufficient life insurance in the first place through a cash value or term life insurance policy, there would be no need to purchase additional insurance for something that has a low likelihood of occurring. Cancer makes news, and many people get upset about it. But, they often fail to realize that there are other diseases that you may be more prone to having than cancer. A person can save the premiums that they purchase just for cancer and use it to purchase additional life insurance that would payout for any reason of death.
Accidental Death Insurance
You should not pay additional money in insurance premiums to protect yourself from accidental death. When you die, it will not matter how you died. Your heirs will claim the life insurance benefits. There is a reason why life insurance companies can offer this type of additional life insurance policy for very little additional premium, the odds of you dying accidently are very low in the grand scheme of ways you can die. Buying the correct amount of term life insurance from the beginning will help ensure that you are covered no matter how you die whether it is an accident or some other way. With accidental life insurance, you are paying for a life insurance policy twice. You are covered if you die accidently or through other means. There are no reasons to purchase additional insurance despite its cheap price.
Mortgage Death Insurance
Having a life insurance policy solely to pay off a debt can quickly become too expensive. Many mortgage brokers and banks offer mortgage death insurance that will pay off the balance of your mortgage should you die. Many credit card companies also offer this type of life insurance policy as well. In most cases, these life insurance policies cost too much in the form of premiums that they provide for the amount of coverage that you receive. You would be better off in most cases purchasing additional term life insurance to cover any debts that you have instead of purchasing these additional policies from your mortgage company. Most of the time, they go straight to your mortgage lender’s bottom line. When a financial planner calculates the amount of life insurance that you need, he or she will look at how much debt you have. They will use this as a planning factor when deciding how much total life insurance that you should purchase. It will be wrapped up in your complete insurance policy and not as an addendum to it.