Reading through a life insurance policy can be an overwhelming experience. The more you read, the more confused you may become if you don’t understand the terminology. A standard life insurance policy may contain things you don’t realize are there. Therefore, it’s essential to know what your policy includes so that you can make any necessary adjustments.
The following are the 5 things you shouldn’t overlook in your life insurance policy.
Insurance companies have the option to add additional riders, such as accidental death benefits to life insurance policies whenever they see fit. Most of these additional riders are free of charge, but some are not. If you see something you don’t recognize or don’t remember adding when you purchased your policy, call your insurance agent and ask them to explain it.
Death Benefit Options for Settlement
Most life insurance policies offer multiple settlement options when it comes to paying the death benefit. Though lump-sum pay-outs are quite popular, you can also choose to have money put in a trust and have specific amounts dispersed at set intervals. Money can also be put in an account where beneficiaries can withdraw money or use it as a checking account.
Term policies may include a conversion option that allows you to convert the life insurance you purchased to a whole life policy after a specific amount of time. While the options for conversion may be limited, the option for converting a term life policy to a universal life insurance policy can lead to maximum pay-outs over a shorter period of time.
Free Look Period
Life insurance policies normally give the policyholders a “free look” period. This is usually 7 to 10 days. In some cases, this period can be stretched out to 30 days. During the free look period, you can choose to cancel the policy without penalty and receive any premiums that had been paid to put the policy into effect. It is normal for policyholders to change their minds about their existing policy or prefer a different one. In such cases, the free look period allows you a chance to opt out of the policy before it is too late.
Grace periods for up to 31 days are put in place for times when money is tight, and you are unable to make your premium payment when it is due. Even if, for some reason, your policy is canceled for non-payment, you have options for reinstatement. Grace periods may give you the time you need to catch up and keep your policy in place.
If there is any part of your life insurance policy that you don’t understand or have concerns about, your first call should be to your insurance agent. For assistance with all your insurance needs and questions, contact the experts at Weaver & Associates in Arcadia, California. We will help you get the coverage you need.