What is No-Load Life Insurance
No-load life insurance is a type of life insurance that charges much lower fees and expenses than conventional life policies. This is due primarily to the absence of a commission for the selling agent. No-load life insurance mirrors traditional life insurance in all other aspects.
BREAKING DOWN No-Load Life Insurance
No-load life insurance policies allow cash value to accumulate faster inside the policy because of their lower cost. However, although its lower cost allows no-load life insurance to provide an affordable alternative to lower-income life insurance policyholders, carriers of no-load policies should be examined for financial stability. No-load policies typically offer very little in the way of customer service.
Many people see the value of purchasing life insurance to protect their families. However, the high cost of some premiums leads many to believe that they will simply not be able to afford coverage for themselves. This creates demand for truly low-priced insurance, which has led some companies to offer “no-load” insurance, which is often much cheaper, at least at the beginning of the policy’s life, than traditional insurance.
Controversy Around No-Load Life Insurance
Some experts contend that “no-load” life insurance does not actually exist. These skeptics believe that the hidden costs are built in, usually as “application” or “processing” fees. Rather than pay this money to an agent, the company collects it for itself to cover the cost of clerical work, processing the policy, and any incidental expenses, such as medical exams or other costs.