Immediate death benefits, also called immediate coverage, are provided within certain life insurance policies. The policy works as the name suggests—when you sign up, there’s no waiting period.
Who Needs Immediate Death Benefits?
One of the most common reasons as to why someone would want a life insurance policy with immediate death benefits is because they’re going through a certain event or a special circumstance has occurred and they need immediate coverage. These occurrences can include but are not limited to:
- Planning for final expenses: coverage for burial, funeral, and medical costs
- Purchasing a new home: pay the mortgage, aka mortgage protection
- Getting married and/or having children: coverage to replace income
- Or, developing health issues: coverage for medical bills and for the need of providing coverage for your loved ones.
How Does An Immediate Death Benefit Work?
After you’ve signed up, you’ll only need to make one premium payment before your policy becomes active. With a life insurance policy, you pay premiums so that your loved ones can get a death benefit if you, the breadwinner, pass away. Many will choose a death benefit that is just large enough to cover end-of-life expenses, like funeral costs. Monthly premium costs are directly tied to the death benefit size.
The policy won’t lapse as long as premiums are paid. If you were to pass away within a month of signing up for this, your loved ones will automatically receive the death benefit. These policies, when compared to a graded death benefit policy, can be a better option for some. This is because, with a graded death benefit, you’ll have a two to three-year waiting period before the full death benefit will be accessible. Once you have been insured for this amount of time, your full death benefit will be accessible to your beneficiaries if you were to pass away.
The death benefit, while often bought to cover funeral expenses, can be used for any reason and is not subject to income taxes.
The Coleman Agency Can Help
If you have a specific need that you have to meet right away, contact The Coleman Agency about immediate death coverage. And, for more information about life insurance, please continue browsing our website.