In my years as an insurance agent, I have had many people seem confused as to the fact that life insurance pays out every time. That people do, in fact, get paid when their family members participate in the purchasing of life insurance. It appears the television has made life insurance appear of less value. When a death is ruled as a suicide, on TV and in the movies, the life insurance doesn’t pay! So typical of the 90’s shows and how others portray insurance. The insurance companies might not always pay for every type of death or everything that happens. The media has influenced people away from paying for, in my opinion, one of the most valuable insurance products anyone could own, life insurance.
This life insurance, well, I am here to tell you today that pure life insurance pays for any type of death! Woohoo, congrats to us all. Any type of death, and the life insurance company will pay your designated beneficiary (the person you want the money left with). I am getting into the morbid, deep discussion about that taboo topic nowadays, death. For some reason, we just don’t talk about death anymore, yet it is the truth about where we are all going. When an insurance agent “files a claim” for life insurance, someone has died:
Car accident death – claim paid
Cancer death – claim paid
Murder death – claim paid
Suicide death – after 2 years of policy ownership – claim paid!
The one guarantee we all get in life is death. This leads to the value of life insurance and how it can help someone build up their estate. The one guarantee in life that will occur will pay their loved ones, and that will happen regardless of how they pass, when purchasing life insurance. This is something you would want to discuss with the agent, and something you would look for within your contract.
When speaking of the contract, let’s flip back to the conversation about suicide and how life insurance pays for any type of death. In a life insurance contract, there is a clause stating that the insurance company will only pay a claim for suicide when the insured has paid for two years of the policy. This clause allows the insurance company to deny a death claim, within the first two years, only when it is a suicide.
This means that my current policy, the one that I have had for 14 years now, would pay out for suicide. Officially, any kind of death claim would be paid, for years now, as I have long since surpassed the two-year clause within the life insurance contract. It is best to advise all clients that after the two-year marker, they are fully invested in their life insurance policies and past any sort of time period where they should be concerned about a claim. An idea that is influenced in many ways.
Maybe due to accidental death insurance, there is some confusion about whether life insurance always pays out or even what life insurance really is.AD&D (accidental death and dismemberment) only pays out based on death due to an accident. Then, when adding the dismemberment, there are other living payouts for disabilities. This is a whole beast of its own, and a course on AD&D will be coming out shortly, along with other courses on life insurance.
I am not a huge fan of AD&D, mainly because accidental deaths are few, and because it seems to confuse the consumers. It steers them in the direction of purchasing something they might not ever see a benefit from. It makes people have buyer’s remorse later. While whole life insurance guarantees payout, and term life insurance can be converted to whole life, it otherwise provides full protection for years.
So remember, next time you are watching the movies, and someone says the life insurance isn’t going to pay out because it’s suicide, remember how false that really is!
