When someone talks about life insurance, they typically cover the basics. You fill out your application form, see how much you’re eligible for and pay off the premiums each month, easy right? However, there’s a lot more to life insurance than you think. Here are four facts you may not know about life insurance.
There’s More Than One Type
One surprising thing that a lot of people don’t know is that life insurance comes in many types and forms. A majority of people simply buy a whole policy and don’t put a second thought into it aside from the premium payments. But a whole policy, while the most practical option, isn’t the only option. Below is a small list that goes over the other types of life insurance:
- Universal indexed
- Variable indexed
- Simplified issued
- General issued
The list you see here is just a fraction of how many life insurance policies there are. Each one of them fulfill a different purpose, so a lot of these policies are only useful in specific situations.
You Can Sell Your Policy
Although it’s the most common way of receiving death benefits, someone passing isn’t the only way. You or a loved one don’t have to die in order to reap the reward. Instead, you can either sell the policy back to the company you got it from or get life settlement. The only real difference between these two options are the buyers. If you choose to acquire a life settlement, you’ll be dealing with a third-party buyer rather than the company.
There’s another type of life settlement known as a viatical settlement. This is a settlement designed for people who are terminally ill, so they can sell their life insurance at a discounted rate. In exchange, they receive a high percentage of the policy’s value. Regular life settlements can give you as much 30 percent while viatical settlements can give you up to 80 percent. Viatical settlements work somewhat differently than traditional life settlements. Be sure to review a detailed guide that goes over everything you need to know about viatical settlements.
You Can Change Your Policy at Any Time
This is probably one of the most unknown facts about life insurance, changing your life insurance policy. It’s more than possible for you to change your policy at any given time. Maybe you have a family and want to expand your coverage or you’re unable to pay for the current policy. Nevertheless, changing your policy is always an option. The reason why many people haven’t heard of it is because of how rare it is. However, life is very unpredictable, and you never know what could change in yours.
The Premiums Can Be Paid Annually
Some insurances allow a policyholder to be flexible with their premiums and life insurance is one of them. While you obviously need to keep up the payments in order to ensure the policy remains active, you can choose to pay monthly, bi-monthly or annually.