|
Policy Clauses Which Protect YOUIts a good idea to know your life insurance rights before you sign the dotted line. So, once you have your potential life insurance policy's terms and conditions in hand, read over it carefully.
Use our insurance term definitions listed below to guide you through any confusing insurance terminology.
This page:
•
Lists standard life insurance clauses that protect you.
•
Gives insurance terminology definitions for these clauses
Premiums can vary by as much as 50%.
Visit Netquote, where you can fill out a short form, select a plan, and input your personal data for a true personalized quote in minutes. Click here to start.
| |
If you want additional protection or rights, you will have to attach a rider to your policy. You can find common riders listed here.
Be wary of policies that try to limit your rights or impose rules and regulations beyond these listed below.
Standard clauses
• Beneficiary Clause
• Incontestable Clause
• Grace period clause
• Spendthrift Clause
• Preference Beneficiary Clause
• Survivorship Clause
Insurance terminology definitions
Beneficiary Clause This is customary to most policies and allows you to name the recipient of your death benefit. Generally the recipient is either an individual or your estate. It is a wise decision to make an individual the beneficiary to insure prompt payment of the death benefit.
Top
Incontestable Clause Usually a required clause on all life insurance policies, this provision limits the time your insurer is allowed to dispute the validity of the statements you have made on your application. Typically the duration is about two years, but this is not guaranteed. You should read over any policy you are considering purchasing to make sure it is included. Otherwise you run the risk of you insurance policy canceling your policy on a formality. With the clause, your policy is incontestable after it has been active for more than the stated period of time. This ensures that the death benefit is paid promptly without the insurance company hassling your family.
Top
Grace period clause Late premium payments can result in the termination of your policy. However, your policy may contain a grace period clause, which allows you 31 days to make the delinquent premium payment without canceling your policy. This clause is usually required by state law, but make sure it is included in any policy you purchase. With this clause, your policy does not lapse for a full thirty days even if you miss your payment. Therefore, in the event of your death, your family would still receive the death benefit even if your premium payment had not yet been paid for the month before. The unpaid premium will, however, be deducted from the death benefit proceeds.
Top
Spendthrift Clause This option protects the proceeds received from your beneficiary from being confiscated by any creditors to whom s/he owes money.
Top
Preference Beneficiary Clause If you fail to indicate your life insurance beneficiary, the proceeds will be awarded to the individuals listed on the policy.
Top
Survivorship Clause You can elect to include this clause in your policy as a method of postponing the payment of the death benefit. After your death, the policy's proceeds will not be awarded until it is confirmed that your primary beneficiary has survived you for a pre-determined number of days.
Top
Next: clauses protecting the insurance company
For more help . . .Getting the lowest possible premium on your life insurance is almost like an art form. There are many variables to consider, and to get the right balance of term length, benefit amounts, and policy riders and illustrations, you need to take a careful step-by-step approach to the buying process.
Our free life insurance course is designed to help you do just that.
Subscribe here:
|
Sign up for our free email course to learn the step-by-step process that will help you get the best life insurance plan for the least amount of money.
Sign up here:
We will not sell your address or send you junk. Privacy policy.
|
|
