Life Insurance Defined
Life Insurance Defined
If you have family or friends that are financially dependant on you, you need to have life insurance. It is known as a protection plan that replaces your income in the unfortunate event of your death. It will keep your beneficiaries from financial ruin by paying out a certain amount upon your death. This amount can be paid over in a lump sum, or it can be paid to your beneficiaries' account every month, to act as an income. It is not as simple as that, unfortunately. There is still a lot to be discussed.
For you to make the best decision when choosing a life insurance policy, it is important that you speak the insurance language: learn the terms and find out what the process is and what happens during it. The owner of a policy is called the insured, the company they have a policy with is called the insurer and the money they need to pay into their policy every month is called a premium. If you were to receive the proceeds of someone's life policy, you will be called the nominated beneficiary and the amount you will receive from the insurer is called a face amount. The estimated amount of time an insured or policy holder has to live is known as the person's life expectancy. So, now that you can speak the language, let's talk.
A life insurance policy can be seen as a legal, binding contract that has terms and conditions that need to be adhered to. Although different insurance companies will have different terms and conditions, they all have specific standard industry clauses as well, such as the beneficiary clause. The clause states that only the policy holder can change, remove or add beneficiaries onto their policies, for obvious reasons of course. Nonetheless, all insurance companies have terms and conditions and it is important that you read and understand them before making a decision.
Insurance companies will always need to do some kind of evaluation to determine if you are a high-risk customer or not. The most common evaluation is the Heath evaluation: doctors will run various tests on you to determine your health status. The results will be sent back to the insurance company to evaluate. Some insurance companies may want more information on you, so they will also do a lifestyle, family history and health history evaluation.
I recently applied for a life insurance policy but was denied one. This was a shock for me as I am a very fit and healthy person, so I decided to make an appointment with my broker, and I asked him what the problem was. He said that the results they received on my family health history suggest that I am a high-risk customer and therefore was denied my policy. Other reasons to be denied a policy includes bad health or unhealthy lifestyle habits, age and if you have a dangerous career or have extreme hobbies and are put at risk more than the average person.
Upon the insured's death, the insurance company requires a proof of death certificate before proceeding with payment. If the insured's death is found to be suspicious in any way, the insurer may choose to investigate the death. If there are no signs of foul play, the insurer will pay the claim to the beneficiaries in approximately 2 weeks. In the event of a suicide, the insurer may not pay the claim, depending on the terms and conditions. Some insurance companies may have a 2 year suicide exclusion period. If the policy holder commits suicide within the 2 year period, they will not pay the claim. However, the insured commits suicide after the 2 year exclusion period, they are obliged to pay the claim, but always look at the terms and conditions first. The insurance company will also not pay a claim if you were only covered for accidental death, but died of a non accidental cause. This is why it is important to know what you sign: read the fine print and ask questions if something does not make sense!
Taking out a life insurance policy can be a daunting decision, but it is essential for anyone that has financial dependants. Imagine finding out that your mother, farther, partner or friend on whom you are dependant on did not leave anything behind to help you carry one. Look after your loved ones even when you are not here: take out a life insurance policy. A Deeper Understanding of the Practice of Gratitude to Reach Your Goals and Improve Your Life Mental fatigue and the effects of it in our daily life Why Purchase Long Term Care Insurance and the Considerations Behind it Find The Best Hawaii Long Term Care Insurance Quotes Company Why a Life Insurance Settlement for Seniors is Important Consumer Reports on Primerica Life Insurance I Call Upon The Living God Who Spoke Life Into Existence – Believe And Be Saved Absurdity of life and organic existence: Imbecile organicists! Absurd themselves! Term Life Insurance Is More Affordable Compared To Whole Life Lower Insurance Bills: Top 3 Tips For Keeping Life Insurance Costs Low ING Life Insurance – Why Go with ING? ING Life Insurance – Protecting Family beyond Death ING Life Insurance – Getting Started with Life Insurance