When Is Life Insurance NOT Life Insurance? - Page 2

Tinkrbl44 · ‎08-23-2010

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.

Anonymous032819 · ‎03-29-2019

@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!

I.

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.

The Sky looks different when you have someone you love up there.

millieshops · ‎03-09-2010

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.

Tinkrbl44 · ‎08-23-2010

@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.

ann1989 · ‎02-24-2019

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

Anonymous032819 · ‎03-29-2019

@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.

The Sky looks different when you have someone you love up there.

Carmie · ‎10-25-2010

@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.

Desertdi · ‎03-13-2010

What would you consider an annuity to be?

♥Surface of the Sun♥

Carmie · ‎10-25-2010

@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.

Kalli · ‎03-11-2010

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.)