When it comes to meeting the needs of those who are financially dependent on you, life insurance on Long Island, NY comes in handy. As one of the most important financial planning tasks to complete, many homeowners take out coverage without giving it a second thought. As a result, many policyholders tend to overlook features of life insurance policies that they could benefit from. Take a look at the most common – and most valuable – features of a life insurance policy.
Consider These Features of Life Insurance
Waiver of premium
This is one of the most common types of life insurance riders. If the policyholder becomes disabled, this rider will pay for the life insurance policy premium so that the policyholder can continue to have coverage for the duration of the policy.
For a term policy, the rider will pay the full premium for the duration of the policy. For example, if someone has a 30-year term life policy and becomes disable with 15 years remaining on the policy, he or she would have his premiums covered for the final 15 years on the policy.
On a permanent life insurance policy, this rider is known as a “waiver of cost of insurance.” The rider covers the cost of the insurance, but not the other portion of the premium that pays for the investment component in the policy.
Accelerated death benefit
This feature of life insurance gives a policyholder the option to receive part of the policy’s death benefit if he becomes terminally ill. What constitutes a terminal illness will vary from policy to policy, but are generally given to policyholders who have less than a year to live. This benefit can help to pay for treatment and other expenses throughout the last few months of life.
Guaranteed purchase option
With this rider, a policyholder can buy more life insurance in the future. Why is this important, you may ask? This feature helps policyholders to secure more coverage without having to take another medical exam. It is a great choice for young people who believe that their income is going to grow and want to be able to buy more coverage quickly in the future.
Cash withdrawals and loans
Most whole life and universal insurance policies accumulate cash value and allow the policyholder to withdraw or borrow money from it. You are able to enjoy low-interest rates, and can even use the cash value of the policy to pay your premiums if you need to temporarily stop paying premiums. However, you must pay back the loan or your beneficiaries will receive a reduced death benefit.
Become familiar with your life insurance policy so that you don’t overlook the important features and optional riders that could be critical to your livelihood. Make sure you regularly review your policy to ensure it still matches your lifestyle, financial landscape, and family. Your insurance agent can discuss further features of your life insurance if you are confused about any coverage.
When you’re ready to get started on your life insurance policy talk to the professionals at Premier Risk Insurance. We serve Long Island and surrounding cities in New York, and we look forward to hearing from you today.