All You Need To Know About Graded Death Benefit Life Insurance
More often than not, we are so busy living our lives that we forget that death is inevitable. It does not differentiate between age, gender, class or religion. If you think that you in your mid-twenties are not prone to any fatal disease or are immune to accidents, you could not have been more wrong. Every human being, irrespective of their age, can leave the face of the planet at any unfortunate point of time.
It might read harsh, but there is nothing truer than this. Talking about death, it is true that you cannot avoid brushing with its shoulders. We all have to go when the time comes. But what you could do is make preparations so that the ones we leave behind have enough resources to live off the rest of their lives without a financial crunch. The best way to secure the future of your dependents is by applying for the perfect life insurance policy.
Life insurance policies see to it that your family members or those dependent on your income are covered throughout their lives. However, contrary to popular conjecture, that is not the only utility of a life insurance policy. There are several types of life insurance policies, each of which comes with its own perks. Therefore, you have a whole world of policies out there to choose from.
Now, talking about the types of life insurance policies, we shall try to form an understanding of graded death benefit life insurance in this article. This type of life insurance is not much spoken about, which makes for the widespread ignorance concerning the same topic. However, let us now try to get some clarification about it so that it becomes easy to take a call in the future whenever there is a life insurance policy to buy.
What Is A Graded Death Benefit Life Insurance Policy?
Life insurance policies were not always as flexible as what they are today. There were times when older people would find it quite challenging to purchase life insurance owing to their health and life expectancy. Agencies would be apprehensive about extending their services to them since there were not many years of benefits that they could mint out of it. Also, people with a problematic medical history would be turned down when they approached these agencies for purchasing life insurance.
However, with time, things gradually changed, and life insurance agencies became more inclusive and empathetic towards the cause of humankind. They started acknowledging the fact that every life deserves to be protected with the very best, and that is why a plethora of policies began coming up. One of those policies is the graded death benefit life insurance policy.
The graded death benefit life insurance policy is the type of policy which every individual is eligible to purchase. However, since life insurance agencies are not exactly charities and they have their own ends to look after, graded death benefit life insurance does not pay the whole amount within the first two years of the applicant’s demise.
It shall start with smaller amounts in the initial years, and then within a five-year span, the entire amount will be levelled. The reason insurance agencies adopt such a measure is because people who go for a graded benefit life insurance are usually the ones with some critical medical history or older people who might not be at the prime of their health.
Therefore, insurance agencies cannot roll a dice on their business and extend their service of complete coverage where there is a substantial risk factor involved. A graded death benefit life insurance makes sure that both the parties involved are placed in an advantageous position. Neither the insurance agency loses out on their share of profit nor the applicant and his/her family have to face impediments while claiming for the coverage.
What Is the Cost of A Graded Death Benefit Life Insurance Policy?
We have discussed at length how a graded death benefit life insurance policy works and who would make for the perfect candidate for this type of policy. Now we shall take a look at the cost of the policy. Since graded death benefit life insurance policy include candidates mostly from the brackets of old age and with certain medical conditions, the risk that the insurance agency takes with this policy is quite a lot.
Therefore, the premiums charged on this policy are also more than the traditional ones. Another thing that must be mentioned at this juncture is that the death benefit might not be the same in the initial years, but the premiums will be the same throughout the term of the insurance. Therefore, it is one less problem to worry about.
We often ignore the policies that are not much talked about because the others are eulogised more than the normal amount. However, if you really analyse these lesser-known policies, you will understand that they have several benefits rolled up their sleeves. Therefore, it is advisable that you scour for all the insurance policies that there are in the market, cut them down to their bone and only then proceed to take your pick. Life insurance is an investment, and you must make the decision of buying one as carefully as possible.