After the initial process of finding the life insurance company whose services and policy type you would like to avail, you work to create the life insurance policy or the legal document with the company. The legal document is the contract between the life insurance company and you that mentions the specifics of the agreement and it includes the cost involved, the terms and conditions and the names of beneficiaries.
Quickhealthinsurance reviews the specifics of a contract in this section. A general overview is given in this section on life insurance policy. You should consult your agent for complete details as well as explanation of your specific policy.
Policy Riders To Life Insurance Policy
Policy riders are used to modify your policy for getting additional coverage, through customization of the policy to suit your needs. There would be additional charge for these adjustments. Riders can also be used to remove coverage that are not necessary and will result in reduction of cost. The following riders could be considered for your needs:
- Accelerated death benefit - the rider provides those who are diagnosed as terminally ill or who are in need of long-term care to get their policy while being alive; the amount remaining, that could be used to pay the death benefit is indicated by the rider.
- Disability income - the rider provides a certain level of income for the duration of your disability or for the time mentioned in the rider.
- Level term rider - through this rider, the policy holder can add a certain amount of term insurance.
- Withdrawal provision - allows withdrawal of money from your policy.
- Accidental death benefit - provides additional benefit to the beneficiary in the event of accidental death. It is also called as “double indemnity”.
- Guaranteed insurability - a certain income is provided for the duration of disability or the time specified in the rider.
- Spouse / children's insurance - the rider is used to provide additional coverage for your children and spouse.
- Family income benefit - provides monthly income to your family after your death for a certain amount of time.
The different clauses and exclusions in life insurance policies
The clauses are the rules that are followed by you as well as the insurance company and the exclusions are the areas where the insurance company does not take responsibility.
- Beneficiary clause - the clause is used to indicate the beneficiary who should receive the death benefit in the event of your death.
- Grace period clause - the clause allows 31 days for late payment of premium without cancellation.
- Survivorship clause - the clause postpones the death benefit to the surviving beneficiary.
- Misstatement of age clause - your policy gets cancelled if false information is provided about your age.
- Spendthrift clause - the death benefits is protected and is paid out to the beneficiary from creditors.
- Entire contract clause - the clause establishes the policy and provides the truthfulness of all statements.
- Reinstatement clause - the clause provides conditions that help in reinstatement of the policy if cancelled due to non-payments.
Points to consider before signing up for a life insurance policy
It is very important to read the entire document before signing the policy to protect your best interests, as it is a binding contract. Make it certain that the policy meets all your needs, including cost, comprehensive coverage and flexibility. In normal circumstance, you are given 10 days time to examine the policy and if not satisfied, you may surrender the policy and get your refund.