Life insurance has evolved over the last decade in several ways, including the types of coverage available, how much you have to pay for it, eligibility terms and additional benefits you can take advantage of. In some ways, it’s changed for the better, allowing consumers like you to take advantage of these improvements. That means you can get the coverage you need at a price you can afford. Take a look at a few of the ways life insurance has evolved in recent years.
1. Types of Coverage
Life insurance companies used to only offer term coverage, but now you can choose between term insurance and whole life insurance. Term life insurance provides coverage for a certain period of time, usually 10, 20 or 30 years. With this kind of life insurance policy, there’s no additional value. However, whole life insurance provides lifelong coverage and comes with additional benefits. For example, whole life insurance may build cash value over time and you can borrow against it in an emergency situation. With whole life insurance, the death benefit is guaranteed, the premium always remains the same and the cash value grows at a guaranteed rate. Additionally, as you age a whole life insurance policy can be easily sold for cash if the coverage is no longer wanted or needed.
The rate at which people are buying life insurance has drastically decreased, but premiums have increased. The older you get the higher your premium will be. But aside from that, premiums tend to increase on their own each year. Due to decreasing interest rates (that prevent insurance companies from making money) and increased competition, insurance companies have raised premiums to make up for losses over the past decade.
As you age, your eligibility for life insurance changes since age is the primary factor influencing the premium rate, whether you want a term or whole life insurance policy. However, becoming eligible for life insurance has become somewhat easier. Before, you had to qualify for a policy by taking a medical exam to prove you were insurable, or to identify any underlying medical conditions. But many companies now offer policies without the need for a medical exam, which is great for people with underlying medical conditions.
4. Additional Benefits
Life insurance is more than what it used to be because now there are certain adds on that can make a life insurance policy a bit more attractive. Some life insurance policies offer add-ons (or riders) that can provide even more protection, such as:
- accidental death add-ons
- accelerated death benefit riders
- term conversion riders
- policy purchase options (that allow you to buy additional coverage in the future, regardless of your health)
- waiver of premium riders (that give you the option of waiving your premium if you become disabled)
- return of premium riders (that reimburse your premiums if you outlive your policy)
Riders can help you avoid common, yet unfortunate events that might affect your life insurance. Considering a rider for your life insurance policy is a wise decision if you want to ensure your coverage continues in the event that something unexpected occurs that prevents you from paying your premium.
Protecting Your Family’s Financial Future
Life insurance has changed and adapted in recent years due to changes in human behavior. But the fact is life insurance can be helpful to have in case of accidents, during travel and as proactive protection for your loved ones. USAA offers innovative coverage that helps replace lost income, pay off debt, cover burial expenses or leave a legacy.
Having a comprehensive policy in place can help you make it through the hard times in one piece without worrying about your finances. Consider your needs and determine what type of life insurance is right for you so that you can protect your family even after you’re gone.