I’m talking about those life insurance policies you can buy for a few bucks a month - mostly pitched during daytime tv to senior citizens who want a couple thousand dollars upon their demise that the family can apply toward funeral expenses? We have a relative on some kind of disabilty who owns nothing, is getting along in years, and god knows when he croaks the money to borrow him has to come from somewhere. Are these policies a good idea, are there downsides, know anyone who bought one? Thank you for any information.
When you get down to the fine print, you’ll find out that the few bucks a month buys “units” of insurance. A unit might be measured in hundreds of dollars of coverage, and you’d have to buy a bunch of units just to get enough coverage for even a cheap burial.
Also, as you’ve probably figured out, the policies are for term insurance. If you miss a payment, you lose coverage. Once you outlive the policy, you lose coverage.
I’m not saying these are good or bad things, just the cost/benefit analysis you need to analyze.
That’s it exactly. Not sure if the rates are the same, but my Pop looked into this (admittedly this was in 1989) and found the only way he would “win” this bet would be to die within 4 years of buying into it at the maximum units. The first 2 years didn’t count (the estate would only get a refund of the premiums paid in).