Most of us who enjoy both a mailing address and bank account are the recipients of periodic life or accidental death and dismemberment insurance offers through the bank. Couched in the language of the prospective consumer’s fears these offers suggest that this insurance is something you and your loved ones simply cannot do without. What would happen, they say, if the primary earner in your family suddenly could not continue earning for the family? Most families would feel the financial loss quickly and so you should think about doing something like buying this insurance, the offer says. And the urgency is emphasized by the bold statement that such events are a matter of when and not if they will happen.
These offers typically require very little in the way of information about you (or your family), guarantee your acceptance and ask for an immediate response to this valuable offer. The prices, even for the highest coverage levels, seem low on a monthly basis and there are several coverage levels to choose from. What’s more, the offer provides you – at no charge – a nominal amount of coverage for the first year.
So, should you sign up for this deal? If you have existing insurance, whether through an employer or individually or both, you probably would not. Better, you may wish to bring this offer to your insurance agent or other advisor to get an opinion on how this fits (or does not fit) into your needs and budget. Note that most life insurance companies will require much more information from you but will also almost certainly charge you less for equivalent coverage.
While you are considering these types of offers, don’t forget to read the fine print. You will find that the insurance company likely is paying your bank a commission if you sign up for the insurance. It is also likely that the insurance company is not licensed to do business in every state or perhaps even your own state. Signing up for the insurance includes your authorization for the insurance company to debit your bank account every month for the premium: easy to start and hard to stop. Always remember that the bank and the insurance company are in business to make a profit and that affects the offer and the coverage you receive. Finally, one offer made clear that once the insured reached age 70, the amount of the coverage (the benefit payable) would be cut in half – but did not state a corresponding reduction in the cost of the insurance. Be sure you understand the offer and make up your own mind.