The smallest details determine how your loved ones will be provided for after your death and what your life insurance rates will be while you are alive. In order to help you gain a better understanding of the details,here are a few of the most frequently asked life insurance questions.
What is Term Life Insurance?
When comparing life insurance,term life insurance is purchased to cover a specific period of time. Term life insurance policies can be purchased for 1,5,10,15,or 20 years. If the insured individual lives past the duration of the term,the policy simply cancels out without paying any benefits. In some cases it is possible to renew the policy on a year to year basis. However,it’s highly likely that there will not be an increase in the premium amount when that renewal takes place since older individuals pay higher premiums.
What is Permanent Life Insurance?
Permanent life insurance is one of the different types of life insurance that,unlike term life insurance,covers the insured for the course of their entire life time. These premiums are made until the insured is deceased,upon which the specified benefits are paid out to the policy’s beneficiaries. Permanent life insurance also builds cash value which allows the insured to take out loans against the insurance policy. The insured can also redeem the policy for its cash value amount.
What happens if a life insurance policy lapses?
Careful attention should always be paid to making timely insurance payments. You don’t want your life insurance coverage to lapse. However,should a lapse occur,it doesn’t necessarily terminate the policy. Generally,life insurance policies have a 31 day grace period. This gives the insured person 31 days to catch up on the past due balance prior to the termination of the policy.
Can a person have more than one life insurance policy?
Yes,you can purchase multiple insurance policies. This is a way of making sure that you have enough coverage to take care of any financial obligations that you leave behind. Be sure that you need additional coverage before buying an extra policy of course. Otherwise,you may wind paying higher premiums for unnecessary coverage.
How do you collect on a life insurance policy?
Upon the death of the insured,the beneficiary will need to locate the policy information and documents. This will provide the name of the insurer and contact information. The beneficiary will need to provide the insurance company with a copy of the insured’s death certificate and follow the insurance company’s instructions on receiving the benefits payout.
Can insurance be taken out on someone else?
Yes,you can take out an insurance policy on anyone that you have an insured interest in. This means that the person’s death would have some sort of affect on you financially. For example,spouses are permitted to take out policies on each other. Likewise children are permitted to take out policies on their parents. This would also apply to business partners.
These were just a few of the most frequently asked life insurance questions. Please let me know if there is a popular life insurance question I missed. Thanks!