A Guide to Understanding Your Life Insurance Policy

A Guide to Understanding Your Life Insurance Policy

Jan 21, 2021


A Guide to Understanding Your Life Insurance Policy
Life insurance policies allow people to cover their loved ones after passing away. However, it's important that you thoroughly read over your life insurance policy so that your loved ones will have the proper amount of financial security. Life insurance policies normally work as a contract in which you meet different premiums in exchange for a lump sum of money after you pass away. There are multiple variables to consider and research will get you the answers you need. Here is a guide for understanding life insurance.
  • Research the Length

One of the most important life insurance tips is to research the length of a policy. There are multiple types of policies that provide coverage during different timeframes. Term life policies cover you over a specific period of time. The timeframe is usually in 10-year intervals. Permanent coverage offers protection throughout your entire life if the premiums are met. These policies include a face value amount, which outlines the amount of money that will be released once you pass away and a cash value amount for which you are eligible at any time.
  • Become Familiar with The Terms

An important part of understanding life insurance is becoming familiar with the terms. Ensure that your policy contains a breakdown of key industry words and phrases included in the policy. Carefully look at the schedule of benefits. The schedule of benefits should summarize your coverage. It should outline the most important information regarding your policy. The insuring agreement will outline the breakdown of how the death benefit will be distributed.
  • Select the Right Death Benefit

The type of death benefit you are eligible for varies according to the type of policy you have. With a term life policy, you have a guaranteed benefit. Your death benefit varies based on other types of policies. For example, the money that you pay towards a variable life policy is measured against the success of different investments. If you have universal life insurance, you can adjust your premium and your death benefit if your situation changes over time.
  • Assess Your Rights

Make sure that your rights are thoroughly defined in the policy. You should have a couple of weeks to look over the policy to see if you accept the terms. You also have the option to change your beneficiary. In some cases, you may need written consent to change the beneficiary. Depending on the policy, you also have the option to withdraw cash. You should also inquire to see if your policy includes a grace period.
  • Exclusions

One of the essential life insurance tips is to look for exclusions. Be aware that there are some risks that your provider may not cover. If you live a high-risk lifestyle, your insurer may not pay your beneficiaries. If you enjoy extreme sports, you may also have to amend your policy to stay covered. Understanding life insurance can be difficult; however, these tips should help guide you through the process. To learn more about how best to protect your future, contact the team at Bell Black Insurance. We can help you tend to your life insurance needs so that you get the best value for your money. We serve Idaho Falls, Island Park, Driggs, Victor, Swan Valley, Ashton, and the neighboring communities in Idaho, as well as Jackson and Star Valley in Wyoming.