What is hybrid term life insurance?
Hybrid term life insurance is one of the newest life insurance products available in the marketplace today. It’s a type of life insurance coverage that blends non-medical and fully underwritten coverage.
How does hybrid term life insurance work?
Under a hybrid policy, you can get initial coverage approved in as little as 24-48 hours. Upon approval, a percentage of the total face amount of coverage will be full coverage (paying a death benefit whether it occurs by illness or injury) and the remainder will be accidental death and dismemberment coverage (AD&D) – for example, 30% of the face amount is full coverage and 70% is AD&D.
After the initial approval and the coverage is placed in force, you have a 6-month period where you can elect to complete a medical exam (length of period can vary by company). If you decide to complete the exam, you can you can turn the entire face amount into full coverage. Even if the results of the underwriting is not favorable and you are declined for converting the AD&D coverage into full coverage, you can keep the initial format of the plan (the split of full coverage & AD&D coverage) as the coverage would already be in force.
For example, if you apply for a $200,000 hybrid term life insurance policy with a 20-year period and you are approved for the initial coverage (let’s assume a 30% full/70% AD&D split), you would have $60,000 of full coverage and $140,000 of AD&D coverage. This means that if the insured died by illness-related means, only $60,000 would be paid to the beneficiary. If the insured died by injury-related means (e.g. car accident), then the beneficiary would receive the full $200,000 death benefit. If you complete a medical exam and are approved for turning the AD&D coverage into full coverage, then the beneificiary will receive the entire $200,000 death benefit regardless of whether death occurs by illness or injury.
Is hybrid term life insurance good coverage for me?
Hybrid term life insurance is a great option for people “on the fence” of whether they want to take a medical exam, are seeking a high face amount of coverage at a low cost, and/or want time to improve health issues such as losing a little bit of weight, improving their blood pressure level, etc.
Please note, an important item to consider when evaluating term life insurance coverage options is the “rate (cost) per $1,000 of full coverage” for a given policy – you want to be paying the lowest cost per $1,000 of coverage as you can. If you do not want to take a medical exam at all for the life insurance coverage, you’re generally paying a lower rate per $1,000 than a hybrid policy – the same thing goes for fully underwritten coverage with a medical exam. If you’re ok with taking a medical exam, you should strongly consider traditional coverage with an exam.
How do I get help figuring out which carrier to apply with?
It’s simple – give us a phone call! We’re licensed with over 40 insurance companies and will shop the case for you to determine which insurance company is going to offer you your desired coverage at the lowest possible cost and help you get it placed in force. Remember, there are no fees for our services.
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