An income benefit

Most people buy a life or accident policy to provide a lump sum, say $100,000 or $200,000. I think that an income benefit is better, say $2,000 a month for 1 years.

If there is a claim, it is likely that the spouse or children may not be knowledgeable about investing the money. There is the risk that the lump sum may tempt other people to find a way to take the money away.

An income benefit avoids the risk.

An income benefit has another advantage. It is possible to specify that the benefit is payable for the remainder of the defined term.

If the term is 20 years, and a claim occupies at year 5, the benefit is payable for 15 years. If the claim occurs at year 18, the benefit is payable for 2 years.

This structure gives a higher coverage for a claim that occurs earlier (and the need is greater) and a lower coverage for a claim that occurs at the later years (when the cost of insurance is higher). A reducing coverge of this type reduces the cost of insurance considerably.

You can insure for a smaller lump sum benefit and add an income benefit. This seems to be the best arrangement.