topic When Is Life Insurance NOT Life Insurance? in Community Chat

When Is Life Insurance NOT Life Insurance?

Anonymous032819 — Thu, 14 Nov 2019 22:30:08 GMT

When it falls under the umbrella of "Life Insurance", but is another product.

As some of you may remember, going through my dad's bank statements, I came across a monthly automatic withdrawl that said, "AAA Life Insurance".

Come to find out, he had a policy for accidental injury/death, and that it is not a true life insurance.

So, if he got injured, or died in a automobile accident, then monies would be paid, but dying of natural causes, they don't pay out on.

So, that solves that mystery.

Re: When Is Life Insurance NOT Life Insurance?

happycat — Thu, 14 Nov 2019 22:41:25 GMT

I think Life Insurance should be Life Insurance and payable upon death. I wonder how many people realize what they are paying on?

Thanks for the info.

Re: When Is Life Insurance NOT Life Insurance?

Nuttmeg — Thu, 14 Nov 2019 22:45:26 GMT

This is called marketing.

Re: When Is Life Insurance NOT Life Insurance?

chrystaltree — Thu, 14 Nov 2019 22:48:39 GMT

A lot of people have that type insurance but the policies are usually called "Accidental Life Insurance" right on the policy. My dad had a couple of them, we found them after he passed away. From cancer.....so no benefits. He'd been a long distance truck driver so I assume that's when he took out the policies and he kept the coverage.

Re: When Is Life Insurance NOT Life Insurance?

tansy — Thu, 14 Nov 2019 23:02:00 GMT

Well, that's disappointing. I had hoped you might get a surprise windfall, @Anonymous032819.

Re: When Is Life Insurance NOT Life Insurance?

Carmie — Thu, 14 Nov 2019 23:20:03 GMT

I have one of those accidental life insurance policies. It only pays for accidental death. The cost is only about $3 a month for $25k. At my age, if I die it will probably be by an accident. I have no health concerns.

When I get old or sick, I will probably drop it.

Re: When Is Life Insurance NOT Life Insurance?

qbetzforreal — Fri, 15 Nov 2019 00:33:08 GMT

My mother got snookered into opening one of those policies through Wells Fargo. She thought she was leaving us something when she passed on. Worthless.

Re: When Is Life Insurance NOT Life Insurance?

cherry — Fri, 15 Nov 2019 00:39:48 GMT

I am sorry @Anonymous032819 . If anyone deserves a windfall ,it is you. I was so hoping this would let you get a place of your own...Don't give up the dream..

Re: When Is Life Insurance NOT Life Insurance?

deepwaterdotter — Fri, 15 Nov 2019 00:47:28 GMT

Wishing you better luck with that prospective job promotion.

Re: When Is Life Insurance NOT Life Insurance?

Silver Lining — Fri, 15 Nov 2019 01:30:21 GMT

@Anonymous032819 , I have that exact policy, a branch of the AAA Life Insurance Company. You're right, it's not whole life insurance. It's for qualified injuries from accidents while driving (it's not automobile insurance), outdoor activities, tripping when you're walking, getting hit by a car or someone riding a bike or something, airline travel and other things like slipping, falling at home or anywhere.

About two years ago I fell off a big, heavy A-line ladder which also fell sideways. I hit the concrete floor of my carport, injured my shoulder and broke my arm. Neighbor called an ambulance. I was in excruciating pain and the ER people were wonderful. My medical insurance paid part of the expenses. My co-pay for the ambulance was about four hundred dollars.

I've had AAA for years. I eventually signed up for the accidental injury policy after learning a lesson from my broken arm experience. It's not expensive and is paid directly to the insured person. It doesn't go through your medical insurance. If you die from the accidental injuries it will pay a death benefit.

Re: When Is Life Insurance NOT Life Insurance?

Tinkrbl44 — Fri, 15 Nov 2019 01:28:36 GMT

@Anonymous032819 wrote:

When it falls under the umbrella of "Life Insurance", but is another product.

As some of you may remember, going through my dad's bank statements, I came across a monthly automatic withdrawl that said, "AAA Life Insurance".

Come to find out, he had a policy for accidental injury/death, and that it is not a true life insurance.

So, if he got injured, or died in a automobile accident, then monies would be paid, but dying of natural causes, they don't pay out on.

So, that solves that mystery.

@Anonymous032819

Sorry, but that IS life insurance. Bottom line .... Everyone dies of one of two things ..... accident or illness (or sometimes referred to as Natural Causes).

Life coverage comes 3 ways: 1)Accidental, 2)Sickness/Illness coverage ... or 3) Both. Each type of coverage has it's place .... not to mention Term Life or Whole Life, but that's another can of worms for another day.

Unfortunately, some people make decisions without proper information. My Dad died of an illness, and had 3 life insurance policies .... all of them for just Accidental Death. My stepmother flipped out when she learned there was no life insurance to be paid out, and Dad thought she was taken care of.

Re: When Is Life Insurance NOT Life Insurance?

Anonymous032819 — Fri, 15 Nov 2019 01:41:13 GMT

@Tinkrbl44 wrote:
@Anonymous032819 wrote:

When it falls under the umbrella of "Life Insurance", but is another product.

As some of you may remember, going through my dad's bank statements, I came across a monthly automatic withdrawl that said, "AAA Life Insurance".

Come to find out, he had a policy for accidental injury/death, and that it is not a true life insurance.

So, if he got injured, or died in a automobile accident, then monies would be paid, but dying of natural causes, they don't pay out on.

So, that solves that mystery.

@Anonymous032819

Sorry, but that IS life insurance.    Bottom line .... Everyone dies of one of two things ..... accident or illness (or sometimes referred to as Natural Causes).

Life coverage comes 3 ways:    1)Accidental, 2)Sickness/Illness coverage ... or 3) Both. Each type of coverage has it's place .... not to mention Term Life or Whole Life, but that's another can of worms for another day.

Unfortunately, some people make decisions without proper information. My Dad died of an illness, and had 3 life insurance policies .... all of them for just Accidental Death. My stepmother flipped out when she learned there was no life insurance to be paid out, and Dad thought she was taken care of.

@Tinkrbl44

I asked the representative why it said "AAA Life Insurance" on his bank statements.

She said that that was an umbrella term, but that they sold other products that fell under that umbrella, but was NOT life insurance.

This policy that my dad had, was one of those "other" policies, but was NOT life insurance, in the traditional sense, where monies are paid out no matter how one dies.

She asked how he died, and I told her, from complications from Altzheimer's.

She said that the policy did not pay out for natural cases resulting in death.

She told me that the policy would ONLY pay out if he was injured or killed in an automobile accident.

That's it!

Checked.

So, yes, he probably did think that he was leaving me money, but the policy that he signed up for, ONLY pays out in certain circumstances.

Those circumstances were not met.

Therefore, I get nothing.

Re: When Is Life Insurance NOT Life Insurance?

millieshops — Fri, 15 Nov 2019 01:44:18 GMT

The credit union I belong to offers $1000 of a policy of that type just for being a member, but, of course, they try to sell more. I've never paid anything to buy more, but I do think the marketing is very clear as to what mine covers. I'm not paying so I truly did not pay much attention, but no way is a "natural" death covered at all. I'm close to positive that no one in my family would even think to contact the CU for anything more than the dollars in my account. That's because I never thought to tell anyone.

Re: When Is Life Insurance NOT Life Insurance?

Tinkrbl44 — Fri, 15 Nov 2019 01:52:18 GMT

@millieshops @Anonymous032819

There are several instances when a person would want to be more heavily insured for Accidental Death than "Natural Causes".

In spite of what I always see as clear descriptions, sometimes people don't have enough information, or know what to ask. I sold insurance for almost 20 years, and my Dad never asked me even one question about coverage. He was funny that way.

Re: When Is Life Insurance NOT Life Insurance?

ann1989 — Fri, 15 Nov 2019 02:00:23 GMT

It was drilled in my head from an early age to never buy life insurance but instead use that money to save.

Re: When Is Life Insurance NOT Life Insurance?

Anonymous032819 — Fri, 15 Nov 2019 02:13:39 GMT

@Tinkrbl44 wrote:
@millieshops  @Anonymous032819

There are several instances when a person would want to be more heavily insured for Accidental Death than "Natural Causes".

In spite of what I always see as clear descriptions, sometimes people don't have enough information, or know what to ask. I sold insurance for almost 20 years, and my Dad never asked me even one question about coverage. He was funny that way.

Well, I'm sorry that I was too stupid to ask the questions that you think that I should have asked.

I guess I should give you all the information, and have you call AAA.

I'm sure that you'll do much better than dumb ole' me.

Re: When Is Life Insurance NOT Life Insurance?

Carmie — Fri, 15 Nov 2019 03:43:50 GMT

@ann1989 wrote:
It was drilled in my head from an early age to never buy life insurance but instead use that money to save.

That is not always good information. If you have a young family, life insurance is vital. If one parent dies, especially if it s the main bread winner, you will lose that income.

Trying to raise children on one income is going to be difficult, if not impossible. Most people can't save hundreds of thousands of dollars needed when they have small children and they are not at their peak of work earnings. Even if mom stays home and has no income, Dad is going to have to pay someone for childcare if she passes.

Once the children are adults, life insurance is probably not needed if you have enough for burial put aside or prepaid.

Re: When Is Life Insurance NOT Life Insurance?

Desertdi — Fri, 15 Nov 2019 03:43:28 GMT

What would you consider an annuity to be?

Re: When Is Life Insurance NOT Life Insurance?

Carmie — Fri, 15 Nov 2019 04:21:48 GMT

@Desertdi I have five different annuities. I opened them to generate tax deferred steady retirement income. Of course if you pass while there is still money in them, the balance will be sent to your beneficiary.

Three of mine are through an insurance company and two are from an investment company. You must start taking payments from an annuity when you are 70 1/2, But can withdraw without penality when you are 59 1/2.

Re: When Is Life Insurance NOT Life Insurance?

Kalli — Fri, 15 Nov 2019 04:39:10 GMT

I remember when my friend took out an insurance policy as a way of saving for college for her son. I told my dad about this and he told me to tell her that this wasn’t a good idea. I told her but she kept the policy. Many years later she confided that it didn’t pay what she thought and was very disappointed. (Obviously I cant remember all the details here but I do remember my friend was not happy about how this ended.)