Life Insurance Policy

Once you have made your decision about which company’s services you prefer and the type of policy you want, you then work with your company on the legal document, or life insurance policy. This legal contract between you and the life insurance company outlines the specifics of your agreement, including costs, assignment of beneficiaries, terms and conditions.

In this section, Life Insurance Info reviews the specifics of a contract. Please note that this is a general overview of a life insurance policy. Please consult with an agent for full details and an explanation of your specific policy.

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LIFE INSURANCE POLICY RIDERS

Policy riders provide a modification to your policy for additional coverage, effectively customizing your policy to your unique needs. You will likely be charged additionally for these adjustments. Riders are also available to remove unnecessary coverage and will reduce your cost as a result. The following are a number of riders you may consider:

• Accelerated death benefit – allows those diagnosed as terminally ill or who need long-term care to collect their policy while they are still alive; indicates the amount remaining to pay the death benefit
• Accidental death benefit – indicates that an additional benefit will be paid to the beneficiary in the event that your death is accidental; also known as “double indemnity”
• Disability income – provides a specific level of income for the length of your disability or for a time specified in the rider
• Guaranteed insurability – additional coverage can be purchased at stated intervals without additional “evidence of insurability”
• Level term rider – allows a fixed amount of term insurance to be added
• Waiver of premium – allows you to stop paying premiums in the event you become disabled and are unable to earn an income; protects the policy from being canceled
• Spouse/children’s insurance – provides additional coverage for your spouse or children
• Withdrawal provision – permission to withdraw money from your policy
• Family income benefit – provides your family with your monthly income after your death for a specified amount of time

CLAUSES AND EXCLUSIONS CONTAINED IN LIFE INSURANCE POLICIES

Clauses provide the rules set forth for you and the insurance company to abide by, while exclusions determine areas where the insurance company is not responsible.

• Beneficiary clause – you indicate the beneficiary to receive the death benefit
• Incontestable clause – protects you by only allowing the insurance company a specific period of time to dispute your policy
• Grace period clause – allows 31 days for late premium payment without cancellation
• Spendthrift clause – protects the death benefit paid out to your beneficiary from creditors
• Survivorship clause – will postpone the death benefit to your surviving beneficiary
• Entire contract clause – establishes the policy and provides that all statements must be true
• Misstatement of age clause – policy may be terminated if you give false information about your age
• Reinstatement clause -- if your policy is canceled because of failure to make payments, you can reinstate it under the conditions of the clause

BEFORE YOU SIGN UP FOR A LIFE INSURANCE POLICY…

Remember, once you sign the policy, it is a binding contract – so protect your best interests by reading the entire document carefully. Be certain that your policy is best suited for you, including cost, flexibility and comprehensive coverage. Typically, you are allowed 10 days to examine the policy, during which you may decide to surrender the policy and get a refund.