Life Insurance Buyers Guide

The life insurance policy exists to allow you to grant your family financial security after your death.  It can assist the beneficiaries in their financial needs and give them a chance to bounce back after they lose your financial support.  If you plan to apply for life insurance, you should highly consider the amount you can afford and the protection your family may need.  It would be best to consider the types of life insurance policies suitable for your case.  The general purpose of life insurance is to provide benefits to the surviving beneficiaries.  Here is a short but essential Life Insurance Buyers Guide to know more about this.

 

Elements that Should Be Included in Your Life Insurance Buyers Guide

The life insurance policy is a powerful tool to ensure that your entire financial affairs will be settled if you die.  Your Life Insurance Buyers Guide must contain the following elements to ensure that it will serve its ultimate purpose.

 

Benefits' Description

 

The application form will not simply be a document with a complete list and description of your purchased benefits.  Your Life Insurance Buyers Guide should contain at least the policy number, term of the policy, type of life insurance policy, amount coverage, and the complete description of the benefits.  It will allow you to prevent any hassles when your family is filing a claim.

 

Rights of the Owner

 

To avoid any possibility of insurance bad faith, you should be very well aware of your policy holder's rights.  A section that states all your rights should be included in the Life Insurance Buyers Guide to secure your rights. For instance, it could consist of your rights to change your beneficiaries, surrender or cancel the policy, transfer ownership, a change specific provisions in the policy.

 

Policy Summary

 

This part of the Life Insurance Buyers Guide describes particular elements added to the policy.  It may include the policy statement, the agent's contact information, the insurer's name, and the amount for at least the first 5 years of the policy, annual premiums, and others.

 

Cash Value

 

As the insured person, you also have the right to know how your insurance company identifies the cash value of your coverage.  It is also necessary that your Life Insurance Buyers Guide state the possible things that can happen with the cash value should you miss your payments on your premiums. 

 

Guaranteed Payment

 

You should also know the exact amount your beneficiaries will receive in exchange for your premiums.  It should include payment tables that define the benefits on an annual basis.  Guaranteed payment should also be included here.  It will allow you and your beneficiaries to know how much they should expect, which will enable them to plan consequently. 

 

Should your insurance company fail to provide you with a Life Insurance Buyers Guide; it will amount to lapses that misrepresent the insurance policy's condition, advantages, and benefits.

 

Life Insurance Policy: Different Options

Suppose you plan to secure a life insurance policy for your family. In that case, it is best to understand that they come in different types and they are not equally created. While the death benefits will be similar in some situations, there will be variations in various elements, such as the cost, duration, and structure. We will enumerate your multiple options and your next possible step if the insurance company denies your claims to guide you towards the better choice.

 

Permanent/Whole Life Insurance

 

In this coverage, you are acquiring guaranteed protection throughout your life. Simply put, you are purchasing coverage that will provide the beneficiaries with a fixed specific amount after your death. To enroll in this type of insurance, some companies will require you to settle the fraction of the premium; the amount is necessary for the beneficiaries to be qualified on your death benefits. This policy carries a particular monetary value that may increase contingent upon the dividends paid by your insurance company. Note that the initial premium will usually be higher than the other available types of insurance. Nonetheless, the increase in the cash value can be used to pay for the premium.

 

Universal Life

 

Adjustable Life, flexible premium or more popularly known as a universal life insurance policy, is a different type of Whole or Permanent life insurance.  It provides cash value to the beneficiaries depending on the interest rate.  The only difference is perhaps that the cash value,  coverage, and premium can be adjusted while the contract is in effect.

 

Variable Life

 

This life insurance combines the concept of traditional life insurance, savings, and the investment fund. It is comprised of different elements such as general and separate accounts. General pertains to the liability account allocated for the individual policy. On the other hand, Separate includes the person’s investment fund.

 

 

Variable-Universal

 

 

It is a combination of the various features of the Universal and the variable life insurance policy. It gives the customers a capacity to adjust their options in terms of death benefits, investments, and premiums.  Unfortunately, the owner of the policy is exposed to investment risks.  The value may increase or decrease contingent upon their investment.

 

 

Term Life

 

Term Life is perhaps the most standard life insurance policy you will encounter. It is intended to safeguard your family from any possible financial loss related to your death. Note that it will only protect the beneficiaries for a limited and pre-determined time.  Under this type of policy, their cash value will not increase. The maximum period can last up to 30 years.  If your life insurance claim is denied, the next thing you need to do is to contact a life insurance lawyer to assess the situation and help you address your issue.

 

If the insurance denies your life insurance claim, the next thing to do is gather all the crucial information and verify the reasons with your agent.   Finally, look for a trustworthy insurance lawyer to help you settle your claim.

Guide on Lapsed Life Insurance

 

Life Insurance policy lapsed means that the contract is no longer active. This can happen if the person insured missed his premium payment and the cash value has been exhausted. It refers to the lapse in coverage which means that the contract will no longer be valid and will not provide death benefit or coverage for the policyholder. This normally occurs when the grace period has already passed. Most insurance companies will also allow the insured person to reinstate their insurance policy after only a short period after the policy lapsed.

 

How to Reinstate your Lapsed Life Insurance

 

Before your life insurance policy lapses, you need to find ways to prevent it. When you miss your premium payment slightly, your life insurance policy will need to go through a 'grace period.' This is a distinct period (generally 30 days) when the insurance agency is still responsible for providing full payout and coverage should the insured person die. After that grace period and the company did not receive the unpaid premiums, it can now be considered lapsed life insurance.

 

Reinstating your Lapsed Life Insurance

 

Depending upon the type of policy and the company's policy, the insurance holder has the opportunity to reinstate their insurance. The owner needs to reinstate their insurance as fast as he can, and he also needs to verify the process and the company's rules when reinstating the lapsed life insurance. Commonly, this process can be completed without any underwriting when reinstating it in less than 30 days; minimum underwriting will be required should it surpass the 30 days.

 

Underwriting

 

Underwriting for your lapsed life insurance will generally require answering basic health questions and confirming that all things pertaining to the health of the insurance owner remain unchanged. Any wrong information or if the owner has been proven to lie deliberately on the question can make the policy null and void.

 

 

The period on the reinstatement is quite important to the policy owner. It gives you the chance to avoid the process of underwriting when reinstating your lapsed life insurance. Avoiding underwriting can guarantee that your insurance premiums will remain low. Even if your health rating remains unchanged, the new policy will be more expensive than the old policy simply because you have aged. The insurance rate will be more costly for the older person. Simply put, reinstating is more beneficial than enrolling in a new insurance policy.

 

When your life insurance policy lapses, reinstating will require a larger payment. If you file for a claim and have been denied, the existing laws provide various protection to the owner and the beneficiaries. Look for a lawyer who has experience handling multiple cases regarding lapsed life insurance to ensure that you will reach a favorable settlement.