It is likely you have seen the solicitations in the mail from your bank or credit card company offering you free insurance coverage, or perhaps you threw them out thinking they were worthless junk mail? If so, you are missing out on a worthwhile freebie!
Here’s how it works: your bank sells its customer list to an insurance company, who then sends an offer to the customers offering a small amount of free insurance coverage (usually $1,000-2,000 of accidential death and dismemberment or term life coverage) that is supposedly paid for by your bank. In the same letter, it provides you the opportunity to purchase additional coverage with the premiums deducted directly from your account. If you read closely, if you don’t elect any additional coverage you owe nothing. There isn’t any catch, except that in most cases you must stay a customer of the bank to keep your coverage. And yes, the policies are real and you receive a policy statement confirming your coverage.
I have recently received $1,000 in life insurance coverage through Discover Card, $2,000 in AD&D coverage from People’s Trust Federal Credit Union, and today received an offer from Chase for $1,000 in AD&D coverage. All of these were completely free! My wife also got one year of $25,000 in term life coverage from a mailing to members of the Texas Society of CPAs, also for free.
While these amounts don’t come close to meeting our full insurance needs, I’m sure my family would have no objections to an extra few thousand dollars if something should happen to me. That could be a few mortgage payments or something to put towards funeral expenses (I certainly know I would have loved for my dad to have had some of these to cover the $3500 of his funeral bill left over after liquidating his assets). If it costs us nothing, why would I deny them that benefit?
So the next time you get something from your bank or credit card company that looks like junk mail, take a closer look. You may be throwing free insurance coverage into the trash!
