Life insurance policies can provide future financial stability in the event of accidental death or dismemberment.

A conversation about life or accidental death and dismemberment insurance may seem grim, but having the right insurance policies to provide financial security in the event of unforeseen and premature death is an essential part of any financial plan. These policies are so important that Forbes recently published an article discussing the need for young adults to take out life insurance policies and even accidental death and dismemberment coverage, which is often overlooked. The Forbes piece discussed a study by LIMRA, a research and consulting group for the financial services industry, which found that Americans are often deterred from purchasing life insurance policies by a fear that it is too expensive.

Those fears, according to the study, are false. Gen Xers were found to overestimate the cost of life insurance policies by 119 percent and Millennials by 213 percent. As a result, financial experts call for young professionals to take another look at life insurance policies.

Life insurance policies: Types

There are many types of insurance policies to consider. In some cases, employers may offer coverage. For those who do not have that option or who wish to supplement the coverage provided by an employer, it is wise to have a basic understanding of the types of insurance available. The more common forms include:

  • Term. This form of insurance provides a set amount of basic life insurance coverage and is often sold with premiums that remain fixed for a specified period of time. Although less expensive than other options, no savings are built up and once the level term period expires, premiums may substantially increase.
  • Permanent or Whole/Universal Life. Permanent life insurance remains in effect for the life of the insured and builds up value, thus providing a savings vehicle or a fund against which the insurer can borrow money. However, the premium costs can be expensive, especially if the insurance is purchased later in life.
  • Accidental Death and Dismemberment. This type of insurance provides benefits in the event the insured dies or is maimed in an unforeseen accident.

It is important to note that life insurance policies are evolving and variations on the types of life insurance that are available are constantly being developed and marketed by insurers. The increase in long-term care needs has also led to the development of policies that provide both life insurance and long-term care insurance, which is highly attractive to buyers who may never need nursing home or other long-term care. As a result, anyone considering a life insurance policy should carefully consider their options to better ensure they choose a policy that meets their needs.

Claims issues: An attorney can help

Those that have taken the steps to better ensure the financial stability of loved ones in the event of premature death or an accidental death or dismemberment expect the policies to provide assistance, not headaches. Unfortunately, issues can arise. It is critical that the insured make sure that the intended beneficiary is clearly named. Other issues may arise if death occurs within two years of the purchase of the policy. And courts frequently hear claims brought under accidental death policies based on disputes over whether the insured’s death was due to an “accident.” When issues arise, it is critical to seek the counsel of an experienced life insurance/accidental death and dismemberment attorney such as the lawyers at DeBofsky Sherman Casciari Reynolds P.C. who will review the details of your case and advocate for your rights.


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