I used to find life insurance intensely morbid, almost as though I was tempting fate to take my life or the lives of my family members simply by preparing financially for that eventuality. The truth, though, is that life insurance is a pragmatic way to plan ahead. And it helps to understand your options.
Purchasing Life Insurance
It is always best to meet with an insurance agent in person to answer your questions. Some agents will come out to your home to meet with you, while others will invite you to their offices. Whatever the case, sit down in a meeting to discuss the different types of life insurance and how they might benefit you.
Prepare a list of questions in advance. Decide what is most important to you: the cost of the premium, the scope of the policy, the eventual payout. And make sure to ask what kinds of criteria must be met. The agent should be willing to discuss with you the different features of every policy and to answer all your questions.
The Life Insurance Physical
In many cases, you won’t be able to purchase life insurance until you undergo a medical exam, which usually consists of blood work. According to MSN Money, paramedicals can be sent to your home or you can submit to the physical in a clinic setting, whichever you prefer.
The goal in a life insurance physical is to determine whether there are any serious health problems that might shorten your life expectancy. If a medical issue is uncovered, your premium quote might increase or the underwriter might reject your application.
The Term and Coverage Amount
Two of the most important aspects of a life insurance policy are the term and the coverage amount. The term is the period for which the insurance policy will be in effect, while the coverage amount is what your beneficiaries will receive should you pass away.
Term life insurance policies might be as short as 10 or 15 years, while universal life insurance policy are often much longer. You don’t have to accept a contract if you don’t agree to these factors, so make sure you read the contract carefully and understand exactly what you are paying premiums for.
Before you execute a life insurance contract, you will need to name the beneficiaries who will receive death benefits. You might name only one person, such as your spouse, or you might include your children as well, or an organization. Make sure you ask whether you can change these details later on without affecting your coverage amount or premium.
Life Insurance Exclusions
Just as your homeowner’s insurance might exclude flooding from your policy, life insurance can exclude certain circumstances from the paying of the coverage amount. For example, many policies will not pay out if the insured dies as a result of suicide.
Some life insurance policies will pay more for certain causes of death, such as accidents or homicide. Look over these details carefully before signing on the dotted line.