I discussed this idea with an insurance agency manager. I said that most people preferred an income benefit to be provided to the family in the event of premature death.
For example, the breadwinner may wish to have a monthly income of $3,000 payable to the family for the remainder of the term of 25 years, in the event of premature death. I suggested a 25 year term, as the children would have grown up by that age.
A monthly payment of $3,000 for 10 years (say) is better than a lump sum payment of $300,000 (say). The family does not have to worry about investing the lump sum.
He agreed with me. He said that his agents have been selling this type of protection, and it is well received. The only disadvantage is that the current products do not allow for inflation adjustment. He said that if the monthly income could be adjusted by 2% or 3% a year, it would be ideal.
This is possible. I shall be designing this product. As it is a term insurance product which ceases after 25 years, the cost will be quite affordable.
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