Accidental Death Insurance to cover home – to purchase or not to purchase?
I bought my first home in Aug-2008. I keep getting a lot of offers in the mail for accidental death insurance to cover my home. Is this coverage that is recommended as a must have or is it a scam? How do you know how to compare companies?
Accidental Death Insurance provides very limited protection for the cost. You would be much better served purchasing a Term Life Insurance Product for the money. I advise that you sit down with a life insurance agent or financial planner that represents various companies so that they can run a Financial Needs Analysis (a review to determine how much coverage you need) and then provide you with a few options and the costs. I would also have them review if you have sufficient coverage to protect your income, i.e. Disability Insurance.
I hope this helps. Good Luck!
July 17th, 2010 at 6:07 am
It would increase your mortgage, and the only person that wins will be your insurance company. My parents bought a house in 1981 and they are both 86 years old today. They spent 28 years paying for Accidental death insurance.
The insurance company does not sell you anything unless they know they are going to win.
Don’t buy it!!!!
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July 17th, 2010 at 6:23 am
Don’t buy it. Don’t buy mortgage insurance either. Your best option is to buy term insurance on yourself. Then should you die due to any reason besides suicide, your family gets the payout and they choose what to do with the money. It’s cheaper for more coverage.
Accidental death means that if you die of natural causes, you’re not covered. If you die from some cause not listed on the policy, you’re not covered. They get to keep all of your premiums, you get to keep nothing. Your house is not paid off. Besides, if you check, you’ll probably find that this insurance is too expensive and extremely restrictive for the coverage you’re getting.
Secondly, mortgage insurance makes the lender the beneficiary, not your family. It is much more expensive than term insurance.
You can’t compare companies because they make it so convoluted that you can’t know the differences.
Life Insurance is a gamble. You’re betting that you’re going to collect, the insurance company is betting that you’re not going to collect. In either case, you lose.
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July 17th, 2010 at 6:49 am
Such offers, while valuable in their concept, are typically nothing more than overpriced ‘declining value term life insurance policies’. If you want to insure that your mortgage is paid off in the event of your early death, simply seek a conventional term life policy from a reputable inexpensive source for such policies. Those will pay a fixed amount regardless of the cause of your death and will generally be less costly on an annual basis.
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July 17th, 2010 at 7:29 am
Accidental Death Insurance provides very limited protection for the cost. You would be much better served purchasing a Term Life Insurance Product for the money. I advise that you sit down with a life insurance agent or financial planner that represents various companies so that they can run a Financial Needs Analysis (a review to determine how much coverage you need) and then provide you with a few options and the costs. I would also have them review if you have sufficient coverage to protect your income, i.e. Disability Insurance.
I hope this helps. Good Luck!
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Certified Insurance Counselor, Licensed Insurance Agent & Broker (Life & Property Casualty) for over 29 years.
July 17th, 2010 at 7:49 am
Accidental Death Insurance doesn’t cover "home".
It is in case you die, and whoever is left behind doesn’t get thrown out on the street by the bank. It covers the debt you’d leave behind.
Surely even in America you are obliged by the mortgage company to get life insurance *before* you qualify for the mortgage?
So.. you have it already. (unless the banks have gone real bananas over there)
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July 17th, 2010 at 8:22 am
Not to purchase.
Two reasons. 1. it’s only going to cover the MORTGAGEE. Why buy insurance to protect the lender? Let them buy their own insurance. 2. MOST people do NOT die via accident – and NO OTHER TYPE OF DEATH is covered. Not heart attack, not cancer, not anything. It must be an accident.
Accidental death coverage is a ripoff. Buying insurance that pays the lender, is also a ripoff. That makes this a double ripoff.
If you want life insurance, buy REAL life insurance, that pays your estate or your spouse. Not the bank.
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July 17th, 2010 at 9:11 am
Don’t buy the accident policy.
My recommendation is to call a LOCAL insurance agent, and have him/her do a free Financial Need Analysis (FNA), or other Total Need Program, to help you determine in your own mind, what kind of coverage you need, and how much coverage you need, if any, based on your particular goals and objectives.
The FNA will also help you determine if you need disability income protection, to provide an income, should you be hurt or sick and can’t work. It will also help you determine if you need a tax shelter, such as an Individual retirement Account (IRA).
According to statistics, disability is a greater risk than death prior to age 65.
Be wary of an agent, or anyone else for that matter, who tries to tell you that you need Term insurance, without first doing an FNA. That would be up to YOU to decide, after the FNA interview.
Term insurance is for a specific need for a specified period of time. It can be part of your plan, but permanent insurance will cover you for life.
According to insurance industry studies, Term insurance has only about 1% chance of being paid in a death claim. The reason is that the policy expires, cancels, or is converted to permanent insurance before the insured dies. The reason Term insurance premiums seem very inexpensive is because the insurance company does not expect to pay the death claim. (Specific need, specified period of time)
I realize that you need insurance protection to cover your home mortgage, but you may also need to cover other debts and obligations as well.
You didn’t say if you are married or have children to protect from financial loss, should you die. If you did, then there are other insurance needs to take into consideration.
The FNA will help YOU determine YOUR specific needs, not just what some unprofessional agent tells you that you need. Your specific need may be just Term, or it may be Permanent, or it could be a combination of both. That is up to YOU to decide, after you have gained some knowledge through the FNA.
Choose a company with an A.M. Best rating of A- (Excellent) or above.
To choose an agent, you might want to start with you auto and home insurance agent, if he/she is local.
Here are some names of life insurance companies whose agents would be able to help you (not in any order of preference):
Metlife, Monumental Life, Nationwide Insurance, State farm, Mutual of Omaha, American General Life and Accident, New York Life, Western-Southern Life, Liberty Mutual, Liberty Life.
Which ever ones you call, have the agent to do an FNA.
Best wishes.
References :
Retired Agent, Mgr., Recruiter, Trainer, 30 yrs. service
Graduate / Moderator Life Underwriter’s Training Council
Former FNA Instructor
July 17th, 2010 at 9:25 am
Accidental death does not cover your home. It covers if you die by accident.
If you want insurance buy a level term life insurance policy with level premims for 30 years. It pays out for any kind of death, not just accidental.
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July 17th, 2010 at 10:07 am
Under your circumstance,I suggest here http://www.InsuranceFreeTip.info/insurance-for-free.htm for you to have a visit.
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