Do you sign up for the free accidental death insurance that your bank offers you? Why, or why not? What’s the downside?
Actuarially, that $1,000 coverage is only costing the bank a buck or two a year, which is a humble gift. The insurance company sells your name and address to other junk mailers. Is there any other aspect to this that I’m missing?
There’s usually an option to buy a much larger policy after they get your attention with the free teaser policy. I think that’s how they make their money. And I think the insurance company is actually paying the bank to get them to mail the advertisement.
I don’t think there is any harm in signing up for the free policy, but make sure your next-of-kin know about the policy and where to find the claim information. And don’t count on them remembering about it when the time comes. You will be unable to remind them or help them make a claim when the time comes. And the insurance company isn’t going to come looking for them.
Is there anything in the contract that is to the bank’s benefit if the insurance isn’t claimed?
I belong to a credit union that gives me a free $3,000 life insurance policy, with the option of buying additional coverage. The insurance company is very aggressive in sending me solicitations to buy coverage beyond that amount. (But I’m single with no dependents and a fairly decent amount in retirement accounts, so do not think I need life insurance at all.)
On the ones I got this week, you don’t get to see the contract. It’s just a one-side only sheet with boxes to check if you want additional coverage. There’s an 800-number to phone if you have any questions on plan details I got two from completely different banks, both with reply envelopes to the same processing center.
I suspect that most people fail to notice that it is for accidental death only, and think they bought whole life.