Ultimate Guide to Life Insurance for Cops

What to Expect from Life Insurance

Considering the special workload of law enforcement officers, it is important to fully understand life insurance terms and conditions. In general, there are three types of life insurance policies available for the average law enforcement officer.
Term life insurance. This type of insurance policy is designed for a specific period of time with a limited benefit payout. This means that over a specific period of time – such as 10 or 20 years, if the officer dies, the beneficiaries receive the benefit of the policy. The most attractive aspect of this type of life insurance is its low premiums, typically far lower than a whole life insurance policy. However, the policy will not pay out if the officer dies after the stated term ends. For example, if an officer purchases a 20-year term life insurance policy for $500,000 with a $20 monthly premium, if the officer does not die within those 20 years, the policy will pay nothing. So if the officer expects to live beyond 20 years , this type of life insurance is not a smart investment.
Whole life insurance. Unlike a term life insurance policy, whole life insurance is very costly, but carries with it no time limit on its payout. When purchased by an officer, the whole life insurance policy will pay out the policy’s limit even if the officer dies in the week after the policy was purchased. Additionally, a whole life insurance policy builds cash value over time. As such, the policy owner is allowed to borrow from the proceeds of the policy. The premium amount is often significantly higher for a whole life insurance policy than a term policy, which is something to consider when making a selection.
Universal life insurance. This type of insurance policy combines features of both a term and whole life policy. This policy has flexible premiums, which means that the amount paid differs from one month to another. It also features investment opportunities, where the policyholder is able to direct the investments of the premiums. The investment options vary widely.

Police Officers and the Need for Life Insurance

The nature of their work puts law enforcement officers at increased risk of injury and death. The inherent risks associated with confrontations, chases and the potential need to use deadly force take a toll on the profession. All too often, police officers find themselves in dangerous situations for which their training has not fully prepared them. The Occupational Safety and Health Administration (OSHA) now ranks law enforcement as the 10th most dangerous job in America. The dangers that come with being a police officer include injury or death due to physical confrontations with suspects, exposure to toxic chemicals or fumes, slips and falls, and repetitive motion injuries. Because of the nature of their work, many police officers find themselves facing life-altering situations and may not have the financial resources to cover protection for their families.
Law enforcement officers understand that their job is inherently dangerous. While they take precautions to avoid on-the-job incidents, a police officer who is wounded or killed on the job may still fail to provide for his or her surviving family members, unless an officer has a plan in place. Typical life insurance products may not provide sufficient benefit coverages due to the unique nature of law enforcement workplace fatality. Many insurance companies are reluctant to provide insurance coverage for this high-risk profession.
Law enforcement officers face unique risks and challenges, both on and off the job. Because of this inherent risk, many law enforcement officers would be unable to support their families financially if killed or injured in the line of duty. Life insurance for law enforcement officers helps protect families with reliable financial support.

Best Companies for Law Enforcement Officers

A few life insurance companies have tailored policies or discounted benefits for law enforcement personnel, recognizing the unique risks and needs of this group. The following companies have an established reputation for working with officers to offer reduced costs and tailored policies based on the specific needs of police officers, sheriffs and deputies. We recommend looking into the following options when shopping for insurance:
State Farm: Recently, State Farm has offered lump-sum benefits to law enforcement families for those killed in the line of duty. In addition, the company has a special memorial benefit for certain law enforcement and public safety organizations.
NFF: NFF (National Fallen Firefighters Foundation) and various insurance companies have teamed up to provide discounted insurance coverage for members of the fire and law enforcement communities. Policies are available to people who are members of a group in good standing and for their spouses.
Mutual Trust Life: This company offers coverage for members of the Fraternal Order of Police that include term, whole, universal and term riders on permanent policies.
Met Life: Met Life has partnered with the Fraternal Order of Police to provide qualified members with term life insurance and lifelong insurance at a discount. They offer education benefits and discounts for those who have been injured in the line of duty.

Beneficiaries for Cops

Each law enforcement officer must consider the ultimate purpose behind their life insurance and the best means to carry out that purpose. For some officers, the beneficiary of their life insurance policy is their most important consideration. Yet for others, naming a trust or another type of account is most appropriate to allow for more specific instructions on how the officer’s estates should be handled.
Choosing the right beneficiary can be a complex process because it is not the same as deciding who will be the "heir." Each officer must ask what happens after I die to make considerations about whom to name as a beneficiary.
Your beneficiaries
A beneficiary is defines as a person or entity that received an asset due to the death of the owner of the asset. The terms and conditions regarding your life insurance policy, both inside and outside of the plan, dictate who your beneficiaries are. Your designation of a beneficiary on a will is specific to the asset in question. That is your opportunity to state how the asset should be handled and a duty of the executor to respect that design. (There are some exceptions and circumstances where the will is not honored but those situations are few.) Choosing the right beneficiary is a critical part of planning your estate distribution.
Life insurance proceeds are not necessarily distributed as you might expect them to be. Sometimes the distribution is automatic and sometimes it is at the discretion of the plan. In other cases, a distribution might occur earlier than you expect, in some cases, before you pass away. Several factors determine when and how a distribution occurs, including: Naming a beneficiary on a life insurance policy does not always wipe away all other distribution designations. Imagine for a moment that you have a $100,000 policy and a house worth the same amount. You designate one person to receive the life insurance proceeds. The $20,000 of the equity in your house is required to be acquired in the probate process. This means that the named beneficiary on the life insurance policy will only receive the insurance proceeds and will not automatically also receive some or all of the equity to the house. The value of these two assets will be added together in the probate process but there is no transfer between the two. If you designate all assets to the same beneficiary, it is important to clarify how the beneficiary may take advantage of the insurance proceeds. Would they pay off the house or simply use the proceeds as cash, leaving you family with a house worth $100,000 and cash assets also worth $100,000, leaving an even distribution? Identifying the intention of how an asset should be treated is the purpose of creating an estate plan.
An executor and a trustee
When deciding whether you want to name a beneficiary, you must also identify how the beneficiary is to receive the benefit. A beneficiary is not always the same as an heir, which is the person who is appointed by the probate court to manage the probate estate. It is important to independently decide whether you would want someone to apply to the probate court to become an executor. An executor is responsible for a probate estate and typically receives funds for their activities. They act as the manager for the probate estate and have specific duties that vary from state to state.
Trusts and trusts accounts provide a means of holding assets for the benefit of a person or entity. You can create a trust to hold the value of your life insurance so that the insurance company pays the death benefit to a bank that holds the trust. The bank receives instructions from the creator of the trust, even if they are not in place at the time of death. This mechanism allows the creator of the trust to determine exactly what happens with the asset, even after they have died. In this respect, trusts are often referred to as creating a more ironclad distribution system.
The plans that your issuers carry out are not necessarily the results that you intend. This is important to consider because what is right in one person’s opinion may turn out to be a nightmare or waste for the next officer making their choice. The relationship between a beneficiary and the officer has an impact on how a beneficiary should be chosen. Finally, further consideration must be considered given the possibility that this estate process might be carried out by the spouse or ex-spouse of the officer.

Policies, Terms, Issues and Conditions

For every policy, there are terms that must be met for the insurance company to pay out. As an insured, you have a contractual obligation to abide by the terms of the policy. A major goal in this article is to help you understand those terms. You’ve paid for this coverage; don’t let your insurance company take it away from you because you haven’t read the fine print.
"Location" is sometimes in the "letter of agreement" portion of the policy. What does the policy say about where the coverage is geographically? Does it offer coverage for an officer that lives in a different city or state? Will the policy only cover the officer’s activities if he or she is within the geographical jurisdiction(s) of the law enforcement agency? The answer varies from policy to policy, so read your contract to find out how your particular policy defines coverage.
"Scope of Employment" will often appear in the definitions section of the policy. It will describe your law enforcement agency’s general "scope of employment" and what types of events or activities your agency considers to be "within the scope of your duties." Be aware of how the policy describes your "scope of employment" and what it means to you regarding your specific (or unusual) law enforcement duties. For example, what does the policy say about your scope of employment and whether the coverage extends to off-duty police work? Some policies may extend coverage to on-duty police work only.
"Temporary Assignment" will usually be in the definitions section. If , for example, the officer is temporarily assigned to a SWAT team, a different department, or a different state, will the policy cover that temporary assignment? What if the officer is assigned to a special task force, such as an organized crime task force with local police departments, the federal Drug Enforcement Administration (DEA), or the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (BATF)? The answer varies from policy to policy, so read your contract to determine whether the specific activity is covered.
"Duty-related Activity" will also usually be in the definitions section. Does the policy offer coverage for certain "duty-related activity"? Under what conditions and circumstances is the activity covered? Again, the answers vary from policy to policy, so examine your contract carefully.
Most policies of life insurance will have some form of "exclusions," which is the list of risks that the policy will not cover. This section of the policy will obviously include exclusions for specific high-risk conduct. Read it closely to understand the exclusion terms.
Policies may also include an exclusion known as a "suicide exclusion." In a suicide exclusion, the policy will not pay out benefits if the insured commits suicide within a certain period of time. The length of this period will vary; in some cases, the exclusion may last for two years. But after the two-year period has expired, the policy will pay benefits if the insured kills himself or herself.

How to Apply for Life Insurance

All insurance applications, including those for life insurance, require a fair amount of detail to provide an accurate picture of the applicant’s risk. In most instances, you’ll be asked simple "yes" or "no" questions with an opportunity to provide additional information in a blank space alongside. The application is generally divided into three parts: identifying information, answers to health-related questions, and questions specific to the applicant’s occupation.
You must be truthful in all your answers. While the insurance company will likely give you the benefit of the doubt if you answer a medical condition question in a way that is not a standard "yes" or "no," they will find certain answers that do not make sense. For example, saying you have high blood pressure, but have no doctor recommendations or prescriptions for it, is likely to throw up "red flags" with the insurance company. Similarly, saying you’ve had prior treatment for depression, and were on medication for a year, but subsequently had no further treatment, will not sit well with them either.
Try to spend a few minutes reviewing your answers just to make sure the information provides a consistent picture. There is no harm in saying you had some problems in the past and are under treatment, as long as you answer the question truthfully.
Medical exams can vary from a full history and physical to a simple finger prick for blood and some basic measurements. These are almost always covered at no out-of-pocket expense to you.
The exam is controlled by the insurance company, so the timing and purpose of the exam are theirs. Be aware that if you answer any question on the application form in a way that places you at a higher risk, the insurance company may refer you to a medical exam with a specific physician. So even if the exam is a simple blood pressure and glucose reading, be prepared for a few "blood work" type tests.
While not all insurance agents will have the ability to change deadlines or modify a contract after it is signed, that doesn’t mean you shouldn’t ask for a change. No matter what type (or how many) insurance policies you currently hold, do not hesitate to ask for extensions or deadlines that accommodate your busy law enforcement schedule.
Occupational questions on an insurance application generally relate to the physical and psychological demands you are expected to meet based upon the nature of your work. If you have any doubt about exactly what the question is asking, be honest with the agent. Do be sure you know exactly what you are saying, to avoid missteps. If the questions are clear to you, answer them in a straightforward way to match what you do, and the duties you perform.
Why does the insurance application ask so many questions? Information is needed to help the insurer objectively examine the risk for which you are seeking coverage. They need to have enough facts to measure the benefit to them against the risk presented by your application. By providing accurate information, you will be helping the insurer use their resources in the most efficient manner, making it less likely they will have to come back to you with further questions that can delay the process.

Understanding Benefits and Financials

Law enforcement officers have unique needs and concerns when it comes to maximizing their life insurance benefits. The strategies they utilize not only impact their beneficiaries but can also influence their own financial security throughout their lives. Fortunately, there are various ways to maximize potential benefits and further enhance financial stability.
As a starting point, officers may not even be fully aware of the various life insurance benefit options that are available to them. There are typically both group life insurance benefits and potential access to in-service death and dismemberment insurance that can be converted into permanent policies at retirement. Officers should be familiar with the entire menu of available options.
One of the most common forms of group life insurance benefits is the employer-paid policy. Sometimes provided entirely free of charge to employees, this coverage often is both convertible and portable , but it also typically terminates once an officer separates from employment. Officers should ensure that they do not simply allow these benefits to expire without any action. Converting these policies into permanent insurance can provide lifelong protection at an affordable and controlled rate.
Gaps between employer-provided and private life insurance policies are often a reality for law enforcement officers. Some will simply neglect to seek out the additional benefits that are available through their employer. This creates a risk that their loved ones will lose out on the benefit of the full breadth of available protection. Officers are encouraged to take steps to make sure that these gaps are filled through private insurance – and that the full benefits are used so that their surviving loved ones will not go without in their time of need.
A common strategy is for officers to utilize low-cost term life insurance policies that supplement their group’s policies. An annual, one-year-to-five-year policy is an option for budget-minded officers who are not looking for permanent protection. For those willing to pay the higher premiums associated with whole life policies, coverage for the remainder of their lives is available and recommended.
Integrating the policies of both types into an overarching financial plan is in itself a form of sound financial planning. Such a strategy allows officers to retain a broader range of their life insurance benefits, while also easing burdens on their surviving loved ones. As with any type of financial decision, a financial checkup with a qualified attorney or accountant can help ensure that these decisions are made seriously and can stand up to genuine need.