Many policyholders with existing life insurance have very little understanding of the value of their benefits in their life insurance policy.  Whether you have purchased insurance through your employer or through an independent agent, some of the commonly overlooked benefits include:

• Accelerated Death Benefit:  This feature allows you to receive cash advances against the death benefit of your policy if you happen to be diagnosed with a terminal illness.  The money can be used to help pay for treatments and other expenses when you have a short time to live.
• Cash Value:  This type of policy accumulates value during your lifetime and the policy pays out upon your death.  The cash value can be used as a tax sheltered investment and as a fund to borrow from, and used to pay the policy premiums later.
• Cash Withdrawals or Loans:  Universal and Whole Life policies sometimes allow you to withdraw or borrow money using the cash value of your policy as collateral.  You can also use the cash value of your policy to pay your premiums if you need or want to stop making payments for a period of time.
• Employee Assistance Programs:  This feature in policies allows for resources to assist the policyholder when personally or professionally they have issues such as martial problems, major life events, substance abuse or legal issues.  Resource services are typically free of charge.
• Guaranteed Purchase Option:  This feature of some policies allows you to purchase additional coverage at designated dates or life events without proving you are in good health.
• Long Term Care Riders: Choosing between a combination or stand-alone policy depends on your personal circumstances.  The primary advantage of life insurance combination products is you are covered if you need long term care coverage and if you do not use the coverage, the life insurance is paid to your heirs.  The Chicago Sun Times highlights in this article “Long-term care combined with life insurance solves problems” how consumers can benefit from life insurance products combined with long term care riders.
• Mortgage Protection:  This feature is typically available on term life policies and will pay your mortgage should you die.
• Spouse or Child Term Riders:  This term policy feature allows you to purchase additional term life insurance for your dependent child up to specific age or for your spouse.  This feature in term policies can be a more affordable way to purchase coverage instead of purchasing separate policies.
• Survivor Support Services:  Some policies offer services to the beneficiaries to assist with financial or legal assistance.
• Waiver of Premium:  This feature of policies pays the premium of a policy should you become disabled or seriously ill.

Term life insurance is a good option if money is tight.  Term life insurance has no cash value options but will provide coverage if you die within the policy’s term.  Most term policies run 10, 15, 20 or 30 years.  This is a good choice for a family that is young and healthy.

Permanent insurance, such as whole life insurance and universal life insurance is more expensive but covers you the rest of your life, no matter when you die and includes a cash value savings account.

Most term life insurance policies can be converted to permanent life insurance within a certain timeframe.