Good Things About Buying Life Insurance
There are lots of things buyers have to consider just before buying any kind of life insurance product. Getting life insurance – especially for the first time – can be quite a difficult job. With such a wide variety of products currently available, and so many companies offering different types of cover, it can be hard to know where to start. Before you start sifting through many policies therefore, it pays to fully familiarize yourself with the general types of products available on the market, as well as to have an idea of the type of policy you’ll ultimately want to secure for yourself. You need to speak with a licensed agent where you live so that you can determine how much protection you need and can afford.
You should consider whether you want to purchase level term or decreasing term life insurance. If you just want to cover a repayment mortgage then decreasing term life insurance is cheaper and could well be adequate. If however, you have dependents, then a level term insurance policy may provide greater peace of mind since you can be assured your beneficiaries will receive the full sum assured.
The insurance provider makes its decision on your insurability depending on very basic criteria. That is gender, age, the amount assured and the policy term. As a result, they need to make certain assumptions about you. Namely, that you are in good health for your age and don’t have a family background of ill-heath; that you don’t have a dangerous work; and that you don’t engage in any hazardous activities. If the aforementioned assumptions are correct, then it’s very likely that your life insurance application is going to be accepted on what is referred to as “standard terms”. However, if you do fall under one of the above categories then your application for life insurance is going to be referred to their underwriters whose job is to evaluate what risk you represent to them and thus, what premium they should charge.
All life insurance policies will pay their claimed death benefits in the event of accidental death. But if you have elected to buy (often for an extra fee), an Accidental Death Rider, the life insurance policy will pay a lot more than the death benefit, sometimes two or three times the total amount. This is sometimes known as “double indemnity” life insurance.
The life insurance riders also are sometimes offered as separate polices known as Accidental Death and Dismemberment insurance, or AD& D. For the purpose of such life insurance riders, an accidental death means a death that’s neither intentionally caused by a human being, like a homicide or suicide, nor the consequence of natural causes such as cancer or cardiovascular disease. There are usually other limitations on accidental and dismemberment benefits, which includes but not limited to death in a surgical procedure, or from a bacterial infection, hernia, or a drug overdose. In addition, many AD& D policies or riders do not cover risky activities like skydiving and car racing.
