So, my credit union, my wife’s credit union, and now my mortgage company are all trying to push some free AD&D insurance (not advanced dungeons and dragons, accidental death and dismemberment–yeah I was disappointed too.)
Its all for like $2500 or so, they say it is free, I can decline at any time, no commitment, etc. etc. I’ve gone over the literature and I couldn’t see any fees or premiums that need to be paid. Appearantly, I just agree to accept the insurance and it will pay out if the unfortunate happens. It’s not like the Credit-watch programs that automatically enroll you in some $30/month service after 3 months.
One thing I’ve learned in life is that no one just calls you up and gives you stuff for free, so whats the catch with these things?
Is there an upsell? Like for only a $1.00/month you would get an upsell to $10,000/month.
Most people don’t die from accidents, at least not the kind they’ll cover. Also look for clauses like the insurance may not pay out double. In otherwords if you have accident insurance from work that’ll pay out, then this insurance won’t pay anything, unless of course you get the upsell.
I would guess they are looking for the upsell and the terms of the free insurance are so restrictive they rarely have to pay out.
I work for a mega-corp that represents millions of employees nation and world-wide for all benefits including AD&D insurance. AD&D insurance is extremely cheap and only costs a few cents a month especially with a payout so low. You can do the math yourself. Not that many people are losing their arms and fingers routinely these days and, if they did, it is a drop in the bucket compared to the hundreds of thousands that did not. I am not sure why they have the option to opt out. It maybe the law where you are or simply for PR or company policy.
Maybe. It still seems that $0 for not offering the insurance is cheaper than the few cents multiplied by the thousands at my credit union.
The upsell could be it, however. I do have a modicum of AD&D through work, so it is possible that they offer insurance that they don’t ever have to pay out for free and then give the option of buying insurance that actually costs something later.
I always decline, so I don’t know what comes next.
It’s the upsell; it’s such a small liability in the real world that it’s cheaper than sending me direct marketing treespam and phonespam.
I was enrolled for the stuff the company credit union offers, and I got notices that I could get $100K worth of coverage for peanuts…
Of course, the company automatically gives me 1.5 salaries worth of life insurance, and aggressive disability coverage too, so… shrug
I’m actually carrying $500K in AD&D for myself and the has-too-many-car-accidents wife, and it costs me less per pay than a Big Mac at the corner McDonald’s…
Often, a reason lending institutions offer free AD&D is because they’re named as primary beneficiaries on the policy so they are able to collect some or all of what you owe them upon your demise. As long as they’re footing the bill, it’s going to be in the category of them protecting their asse(t)s. It’s also a possible reduction in the financial burden on your family, just like any AD&D insurance would be, but the fine print is important here. Just make sure that you are aware of exactly where that money would go, because even if it costs you nothing, it’s still a part of your financial profile.