It is no secret now that most of the people don’t understand the life insurance policies that they own or the subject matter of their policies. Life insurance is actually a vital financial tool and important part of your financial planning, which is incumbent upon you to have the basic level of understanding.
Here are three pitfalls that need to be aware of:
Incomplete details in the application
All of the insurance contracts have two-year contestability clause that means an insurer can go for a submitted claim within that two years time duration if the material information was not disclosed during the process of application. If you have somehow forgotten to note a related fact in the application pertinent to the claim, there is a chance that claims will be denied. A copy of the original application makes a major part in the policy often and generally supersedes the insurance policy itself. Every insured person gets 1o day right to review their insurance policy after receiving it. During that time period, if you feel that the policy is not up to the mark as you have thought it to be, you are eligible to return the policy to the company and all of your paid premiums will be refunded.
Buying the right term coverage as per your requirements
This process should start with a common question, what do I need the insurance? If your necessity to cover a liability or a debt then term insurance is best for you, if your need is for a more long-term such for the final expenses, then whole life or permanent life insurance would be a better fit for you. Once you have identified your requirements, you can now
choose your coverage level.
There is an end to your term policy, generally 5, 10, 15, and 20 or sometimes up to 35 years.
Buying the personal life insurance vs. creditor life insurance
One of the biggest misconceptions that people have is that their creditor life insurance is true personal life insurance coverage and will protect their family in their death. Creditor life insurance, such as the mortgage life insurance is designed to cover your remaining debt. Personal life insurance is also a great asset to have for a number of reasons. When you buy no exam life insurance or any other insurance, do it with your complete peace of mind and by
having a complete assessment of the insurance.