Supplemental Life Insurance
Supplemental life insurance can be a euphemism for several different kinds of products available to almost everyone. These types of policies are meant as add-ons to regular policies when the coverage may not be quite complete enough for the customer. These add-ons are not riders of regular insurances, but rather additions to them that regular insurances wont provide. They wont provide them because the additional coverage usually carries more risk, and so the risk is transferred to the customer when offered outside the normal scope of life or health insurance provided by an employer. Keeping add-on coverage outside the normal scope of regular insurance offerings serves to help keep premiums low and affordable for everyone.
Supplemental life insurance is available for the individual at varying costs, depending on the health of the individual, how much coverage is needed, life expectancy and the health of the purchaser. In all cases of individualized insurance purchasing, the supplemental coverage will most likely cover funeral costs and everyday living expenses when someone passes away. Coverage could be accidental death coverage, where in the event the policy holder dies in an accident, the company will pay a stated amount of benefit depending on how much coverage was purchased. For example, the benefit may pay $20,000 to $80,000, but may expire after a certain age. Be sure to understand the limitations on the policy and when it expires. Then there is coverage available that will pay out a benefit if the policy holder dies of a terminal disease, becomes disabled and needs a nursing home, and other similar types of health problems. These policies will pay out benefits while the policy holder is still living as well. Companies can insure up to age 100 and beyond. These days the extension of the policies are getting longer, simply because people are living longer than ever as time goes on.
As is the case with most supplemental life insurance, the cost will vary depending on what area of the country in which the purchaser resides. Insurance companies use actuarial tables which calculate risk on lives, and geographical areas are considered when quoting rates for policies. This is why it is important to get quotes from several companies, rather than relying on one. The more providers that are called, the more likely it is the customer will find a cost that is acceptable to the budget. Remember that younger, healthier people will get the best rates, especially if they are non-smokers, vegetarians, and have a normal body weight. Ask the provider about what other types of discounts may be provided - there may be quite a few. If a covered individual becomes disabled at a very young age, the company may even waive the premiums up to a certain age, such as 70. "Though I walk in the midst of trouble, thou wilt revive me: thou shalt stretch forth thine hand against the wrath of mine enemies, and thy right hand shall save me" (Psalms 138:7).
Surprisingly, supplemental life insurance can serve as a means to saving for retirement. There is no limit to how much can be saved via a life insurance policy. Think about it - the money going into the policy can be saved tax-deferred for many years, and depending on the type of coverage, can even be tax free to the beneficiaries as well. In these days when it is harder than ever to save due to hard economic times, using life insurance as a retirement savings vehicle could be the life-saver many are looking for but had not considered up until now. Social security may not be around when the average middle-aged individual is ready for retirement, and because saving is so difficult, making regular contributions to 401(k) plans or IRA's can be just a dream. Hopefully most people have saved or are saving in one of those venues. Adding a supplemental life insurance policy to the mix could be the difference between difficulty and comfort.
To figure out how much supplemental life insurance is needed, add up all the current debt owed right now, figure in how much a funeral will cost and whether or not there are any dependents who must be cared for after the policy holder's death. Think about car loans, student loans, credit card balances, etc. This is the amount that needs to be covered. Do not forget about how much it will take to pay off the house, as this is the biggest debt or expense most people have. For most, a policy worth $250,000 would be a minimum amount in order to meet expenses and have a little left over. Another benefit to supplemental life insurance, if it is a whole life policy, is that loans can be taken out if unforeseen expenses crop up in an emergency. However, if the loan is not paid back by the time withdrawals begin, the amount of the benefit is reduced by the amount owed.
Finally, most companies providing supplemental life insurance coverage will ask for proof of prior or other coverage at the time of the application. Applying for benefits outside of the application period, especially through employers, will mean a letter of credibility must be obtained from the insurance provider in order to obtain the supplemental coverage. Simply calling the provider of the current policy provider should yield the needed document, which can then be forwarded to the company to which the customer is applying for supplemental benefits. If the letter cannot be provided, then there will most likely be a six month or longer waiting period before the benefit kick in or become effective. Make sure the terms are well understood so that there will be no surprises.
Supplemental life insurance is available for the individual at varying costs, depending on the health of the individual, how much coverage is needed, life expectancy and the health of the purchaser. In all cases of individualized insurance purchasing, the supplemental coverage will most likely cover funeral costs and everyday living expenses when someone passes away. Coverage could be accidental death coverage, where in the event the policy holder dies in an accident, the company will pay a stated amount of benefit depending on how much coverage was purchased. For example, the benefit may pay $20,000 to $80,000, but may expire after a certain age. Be sure to understand the limitations on the policy and when it expires. Then there is coverage available that will pay out a benefit if the policy holder dies of a terminal disease, becomes disabled and needs a nursing home, and other similar types of health problems. These policies will pay out benefits while the policy holder is still living as well. Companies can insure up to age 100 and beyond. These days the extension of the policies are getting longer, simply because people are living longer than ever as time goes on.
As is the case with most supplemental life insurance, the cost will vary depending on what area of the country in which the purchaser resides. Insurance companies use actuarial tables which calculate risk on lives, and geographical areas are considered when quoting rates for policies. This is why it is important to get quotes from several companies, rather than relying on one. The more providers that are called, the more likely it is the customer will find a cost that is acceptable to the budget. Remember that younger, healthier people will get the best rates, especially if they are non-smokers, vegetarians, and have a normal body weight. Ask the provider about what other types of discounts may be provided - there may be quite a few. If a covered individual becomes disabled at a very young age, the company may even waive the premiums up to a certain age, such as 70. "Though I walk in the midst of trouble, thou wilt revive me: thou shalt stretch forth thine hand against the wrath of mine enemies, and thy right hand shall save me" (Psalms 138:7).
Surprisingly, supplemental life insurance can serve as a means to saving for retirement. There is no limit to how much can be saved via a life insurance policy. Think about it - the money going into the policy can be saved tax-deferred for many years, and depending on the type of coverage, can even be tax free to the beneficiaries as well. In these days when it is harder than ever to save due to hard economic times, using life insurance as a retirement savings vehicle could be the life-saver many are looking for but had not considered up until now. Social security may not be around when the average middle-aged individual is ready for retirement, and because saving is so difficult, making regular contributions to 401(k) plans or IRA's can be just a dream. Hopefully most people have saved or are saving in one of those venues. Adding a supplemental life insurance policy to the mix could be the difference between difficulty and comfort.
To figure out how much supplemental life insurance is needed, add up all the current debt owed right now, figure in how much a funeral will cost and whether or not there are any dependents who must be cared for after the policy holder's death. Think about car loans, student loans, credit card balances, etc. This is the amount that needs to be covered. Do not forget about how much it will take to pay off the house, as this is the biggest debt or expense most people have. For most, a policy worth $250,000 would be a minimum amount in order to meet expenses and have a little left over. Another benefit to supplemental life insurance, if it is a whole life policy, is that loans can be taken out if unforeseen expenses crop up in an emergency. However, if the loan is not paid back by the time withdrawals begin, the amount of the benefit is reduced by the amount owed.
Finally, most companies providing supplemental life insurance coverage will ask for proof of prior or other coverage at the time of the application. Applying for benefits outside of the application period, especially through employers, will mean a letter of credibility must be obtained from the insurance provider in order to obtain the supplemental coverage. Simply calling the provider of the current policy provider should yield the needed document, which can then be forwarded to the company to which the customer is applying for supplemental benefits. If the letter cannot be provided, then there will most likely be a six month or longer waiting period before the benefit kick in or become effective. Make sure the terms are well understood so that there will be no surprises.
Supplemental Life Insurance
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