Questions to Ask about Whole Life Insurance
June 19, 2009 |
Featured, Whole Life
Once you have made the decision to purchase whole life insurance, it’s time for you to begin looking for an insurance policy that will not only be the best deal for you, but fit your needs as well. To ensure that you completely understand the insurance policy you are purchasing and end up with the best deal, there are questions you need to ask your insurance agent or company.
1. What does the insurance policy cover exactly and what events are not included?
The worst shock for your family would be if they had to file a claim and discovered that, for some strange reasons, the policy was invalid. To prevent these types of problems from occurring, it is critical that you completely understand exactly what coverage your life insurance policy provides. Your policy may cover accidental death, but not cover, as an example, high risk sports. if you love to mountain climb or sky dive, then that insurance policy would not be right for you.
If you are purchasing critical illness insurance with your policy, be absolutely certain that you check what coverages apply and read all of the fine print. The major reason that critical illness claims are rejected is because the insurance didn’t cover that specific illness, and the policy holder didn’t realize it until it was too late.
2. Can you select multiple beneficiaries and name anyone as your beneficiary?
Most people who purchase whole life insurance name their partner or spouse as their beneficiary. Most policies will allow, however, policy holders to name more than one beneficiary, provided all beneficiaries have “insurable interest.” What that means is that they must either suffer an emotional or financial loss if you should die. Your beneficiaries could be your children instead of, or in addition to, your partner or spouse.
3. How is an insurance claim made on the policy?
Unless you have added critical illness insurance, it is your beneficiary who will be filing the claim. You should find out as much as you can about the filing process when you purchase your whole life insurance and ensure that at least one of your beneficiaries has all the information that will be necessary to file a claim.
4. Can you premiums be increased?
Not every policy increases based on your state of health and age. Rising premiums do make a significant difference to the yearly cost of your policy, so this question is an important one to ask. However, be aware, that even if an insurance company states that they don’t raise individual policy premiums, that does not necessarily mean that your premiums will never increase. If your insurance company raises the premium rates for your entire class, then your cost would go up.
5. What would happen if I didn’t make a payment
Most insurance companies will provide you with a grace period that is at least one month in duration to give you a chance to repay the missed premium payment. After the grace period ends, the policy lapses. Some insurance companies also have a second grace period that allows you time to resume your premium payments. Usually if you miss a second grace period your policy will lapse permanently.
6. Will you save money on your premium if you pay by direct debit or pay on an annual basis?
Many insurance companies will offer discounts to policy holders who pay their premiums by direct debit or pay for the whole year at one time.
Tags: increased insurance premiums, multiple beneficiaries, whole life insurance questions
