21/05/2012
Getting the proper life insurance information can be the difference between choosing the right policy and one that does not meet your needs. Life insurance is a necessity for everyone in today's society. If you do not have it, you could possibly devastate the lives of your family if you die. Providing for your family when you die is critical and life insurance is the way to do just that. So what do you need to know about life insurance?
Whole Life Insurance
One of the most popular life insurance policies in the market is whole life insurance. This form of coverage has been around forever and it will always have a place in the market. It is considered a lifetime policy as it is good as long as you pay the premium. One aspect of whole life insurance is that it builds cash value. You can borrow against the cash value or cash it out whenever you choose. The insurance company actually takes part of your premium and uses it to invest. This is how your policy is able to provide a cash value. It also has a mortality benefit and will pay out a predetermined amount to your beneficiaries upon death.
Term Insurance
Term insurance is another form of life insurance that has been around for many years. Term insurance, as a rule, is cheaper than whole life insurance. Term life insurance is only good for a certain amount of time. A common time period for a term policy is 20 years. This is designed for those that want to protect their families in the event of their death only. it builds no cash value and cannot be cashed out at any point. It covers you during the most important time of your financial life. When you first start out, you usually get a mortgage, car payments, student loans, and young children. If something were to happen at this point, it would leave your family in a lot of trouble. This is a cheaper option to obtain life insurance.
How Much?
There is no amount that is right for everyone. It depends on several factors including: your dependents, your total debt, and your lifestyle. If you do not have a mortgage or much debt, you can probably get by with a small policy. If you are making payments on several things, you should probably consider a larger policy. It also depends on how much you want to leave your family if something were to happen. You can get a policy just to cover your debts or to that and a little more. It is entirely up to you.
Finding a Policy
There are a lot of companies out there to choose from when buying life insurance. Compare them on an independent review website and find out who the most popular carriers are. Then compare prices on their websites to see who has the best deal. There are a lot of factors involved in a policy and you should ask an agent to explain everything. Just make sure that you understand everything about your policy before you buy it.
4 Examples of Life Insurance Concealment.
Life-insurance concealment occurs when an individual who is trying to get a life insurance policy does not provide important information to an insurer. This can negatively affect the insurance contract, and it could void the contract if the insurance company finds out the truth. Here are a few examples of situations that could represent life-insurance concealment.
1. Not Mentioning Smoking
One of the most common examples of life insurance concealment is when an individual does not tell the insurance company that he smokes. The individual could smoke two packs of ci******es per day and then not tell the insurance company this when he fills out the application for a life insurance policy. When he tells the insurance company that he does not smoke, he will receive a less expensive premium. However, smoking significantly increases the risk of the individual to suffer from a number of conditions like lung cancer and emphysema. If the person then dies of a smoking-related illness, the insurance company may not pay the claim because it did not know about the smoking.
2. High-Risk Professions
In some cases, individuals will not disclose their true professions when filling out life insurance applications. Some jobs are much more dangerous than others, and life insurance companies need to know if you work in a dangerous vocation. If you work in a dangerous setting, you could significantly increase the odds of dying at a relatively young age. For example, if you are a sky diving instructor or a coal miner, you have a much more dangerous occupation than the average person. The insurance company will typically charge you more for insurance premiums, or it will deny coverage to begin with. If you die on the job, the insurance company may not pay your claim.
3. Serious Health Condition
Another example of life insurance concealment is when an individual does not disclose to the insurance company that she has a serious illness. Some life insurance companies will not do comprehensive testing that can tell if you have any type of disease. Some companies will require a basic blood test and a physical examination. However, some things will not show up during this examination. If you know that you have something wrong with you and you do not disclose it, this could be considered concealment. If you die from this condition shortly after purchasing life insurance, there is a good chance that the life insurance company will not pay the claim.
4. Dangerous Hobbies
If you engage in dangerous hobbies on a regular basis, your life insurance company should know it. Many people regularly engage in thrill-seeking activities in order to experience a rush. While there is not necessarily anything wrong with this, you should tell your life insurance company if you are at an increased risk of death. For example, if you regularly go bungee jumping or extreme rock climbing, it could have an effect on your life insurance policy.
