Many consumers have asked what would happen if I was sick and unable to work, thus not being able to pay my monthly life insurance premiums. This is a very real scenario that happens to millions of people nationwide, and the threat of losing that policy can put their family in financial ruin in the event of their death.
But, there is no need to worry; hope is not lost. There are steps that you can take to protect your finances and your life insurance policy should you become ill and unable to meet your monthly payments. One way is to have a waiver of premium or critical illness insurance.
You may be able to add a “waiver of premium” when you purchase your policy at an additional cost. This waiver protects you after you have fallen too ill to work for a period of time, which is determined by your individual policy. Instead, your insurer pays these premiums for you, which keeps your life insurance policy active during this time. But, this isn’t just a broad safety net. You would have to meet the specific definition or incapacity determined by your insurer to be eligible.
Depending on your waiver terms, your insurer will continue paying your premium until your policy expires, you’re able to return to work, or you no longer meet the definition of incapacity.
But, say you’re a worst case scenario: You not only cannot pay your life insurance premium, you can’t pay your mortgage or monthly bills either. This is where critical illness could help.
Critical illness can be added on to your life insurance policy or purchased alone, which will pay out a tax free cash sum upon the diagnosis of a critical illness that your policy covers. This money can be used however you feel is necessary.
You never know what may happen to you down the road; it’s always a good idea to purchase additional coverage to fill the gaps in your life insurance policy. Too little coverage is worrisome, but it’s never a bad thing to have too much coverage.
These are very real concerns on clients’ minds, as a National Agents Alliance team member, be sure to address these concerns and the options available to help cover them.