In 1997 I was approach by a wholesaler of insurance products. A nice enough fellow, he was quite young but I decided to give him a few minutes as a courtesy. At the time, I was a branch manager for a major financial services organization. As we spoke, he fumbled over a few basic points on insurance coverage, but I must admit, he was trying.
That’s when he said it. The words that made me excuse him from my office – “…and we offer some great accidental death policies.”
I suppose there are times that accidental death insurance makes sense. Mainly, this is when it’s offered by your employer for free.
I could never figure out why accidental death insurance was important – NEVER. As a child I can remember a relative in the 1970’s joking he was going to obtain this type of policy before boarding an airplane. Why? Even later in life, accidental death was included in my various finance classes and was a licensing requirement within the investment industry. To me, this made little sense.
Why would your family need more money because you died in an accident? Whether you have a heart attack in your sleep or crash into a tree skiing, aren’t your family’s financial needs the same regardless of how you bite the bullet?
That’s why I have chosen level term policies to satisfy my life insurance need. Low cost, it allows me to determine the amount of insurance I want at a reasonable price. Currently I am considering a $250,000 policy for a term of 10-years (I am 45 years old) through a major carrier. My annual premium would be just $290.00 given I qualify for preferred status.
I have been fortunate to have served many years in the financial services industry. The benefit to my own financial situation is that I have seen the best and most convincing sales pitches, yet I would like to think common sense prevails.
I can only guess how many hundreds or thousands of dollars I have saved by shunning accidental death insurance.
Today, I laugh when credit cards and other entities solicit so-called perks by offering useless insurance such as accidental death. Going forward, hopefully you will, too.
Sources: fidelity.com
nytimes.com
Robert Watkins is former investment professional and partner. His career spanned 25 years as a financial services and consulting advocate. Robert lives with his family in Glen Mills, Pa., and is a frequent contributor to Yahoo! News and Finance.
