Posted on Sun, Jul 29, 2007
A recent Life Insurance Tutorial in the Business Standard points out some of the general “rules of the road” which policy holders can encounter. It is important to know all of the relevant clauses in “the Fine Print,” before signing on the dotted line.
Here are a few of the general “rules of thumb.” Policies vary so you’ll want to check your specific insurance policy to see how these may apply to your individual situation.
1) In investment-oriented life insurance policies, a policy will usually get converted into a fully paid-up policy, only after the premiums for the first three years are paid. Otherwise the policy lapses, and the policy holder does not receive any proceeds at the end of the tenure.
2) In a term life insurance policy, there is no concept of fully-paid up as there are no maturity benefits payable. Hence the policy lapses if the premium is not paid every year.
3) A grace period (usually 30 days), is sometimes given to the policy holder whereby the insurance policy remains valid from the due date of the premium, to allow the insured to pay the premium during the said period. Should the insured die during the grace period, the insurer is liable to pay the death benefits to the beneficiaries less any amount outstanding (including the unpaid premium).This provision helps the insurer to minimize the risk of policy lapse unintentionally.
4) A lapsed policy may occaoccasion be reinstated if it is carried out within a certain period. However, this may only happen if the insurance company is convinced that the erstwhile policy holder is still an insurable risk, and the health or financial condition of the person has not changed for the worse. For reinstatement, all overdue premium and interest must be paid.
5) A suicide clause provides that during a period (usually one year from the inception of the policy), if the insured commits suicide, the insurer will not be liable to honor any death claim. However, the onus to prove that the death was due to suicide lies with the insurance company.
6) An incontestable period (usually two years and beyond after the policy is in force) is imposed. Once this period is in force, the insurance company cannot nullify or void a policy on the basis that the policy holder has made any misrepresentation or omission at the time of entering into the insurance contract. This usually pertains to non-disclosure of health related conditions prevalent at the time of application. However this clause will not affect the rights of the company, in case there is any fraud involved. But, the onus of proving fraud lies on the insurance company.
7) A misstatement of age clause is inserted by the company to protect itself against the insured wrongly stating his/her age. The redeeming part is that in case this happens, the policy will not turn void. It shall be valid, except that in the event of the insured’s death, the death benefit shall be adjusted in accordance with the actual age of the insured.
An assignment clause is also usually present. Assignment refers to a transaction where a person’s rights and benefits under a contract are transferred by him to someone else. Oftentimes, the policy owner can assign the policy to whoever he wishes. He can make an absolute assignment, in which event the benefits of the policy is irrevocably transferred to the assignee or it can be by way of a collateral assignment, where the policy is a collateral for a debt and the it will be reassigned once the debt has been paid off. These are few clauses that you need to know so that you and your beneficiaries are not subjected to financial strain after the policy holder’s death.
These general ground rules could apply to your insurance policy, but since your mileage may vary, it always pays to examine your personal policy for details. Check out the Efinancial Life Insurance E-Learning Center for lots more information on life insurance policy features, topics and restrictions.
When you compare insurance rates and shop for the best deals in term life or other types of life insurance, it pays to know the score.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Jul 16, 2007
A study in Australia points out that “wealth protection” has improved in that country thanks to record levels of personal debt and prosperity.
Consumers insure assets to protect themselves from losing them. Buying a house goes hand-in-hand with home and contents insurance. Buying a car automatically makes you think of car insurance. After all, why work hard to buy things and then risk losing them, with no way to replace them?
But, when it comes to personal insurance, many are underinsured. The 2006 Mercer Financial Literacy and Retirement Study of 802 working Australians found 63 per cent of people who had a mortgage did not hold income protection insurance.
More than half of all respondents appeared confused about whether they had life insurance or not. The Aussies are asking thesemlves whether personal insurance is necessary? What if your job isn’t dangerous, you consider yourself fit and healthy? Well, it’s not so much the office paper cuts they need to worry about.
Consider these statistics:
Heart, stroke and vascular diseases kill 50,294 Australians annually (37.6 per cent of all deaths). Cancer affects one in three, and kills more than 36,000 people annually. And disability? One in three of us will have up to three months off work during our lifetime due to disability. One in two over 30 years of age will suffer asthma, cancer, heart disease, diabetes, injury, mental health or muscular/skeletal conditions.
Without good health, individuals may not be able to earn an income, meet repayments or provide for loved ones. It may also be a struggle to keep growing personal assets, for example contributing to managed funds, shares, or investment property.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Jul 10, 2007
Journalists demand life insurance
We live in turbulent times. Not surprisingly, journalists and other media personnel who cover global conflicts from the front lines want to look out for the families should catastrophe strike.
Expressing concern over the killing of a cameraman while performing duty in Islamabad, those involved have demanded of the owners of newspapers and TV channels to provide life insurance to the journalists’ community and asked the government to facilitate media persons for live coverage of conflict reporting while devising some code of ethics.
The demand was made through a resolution adopted unanimously at a joint meeting of the Union of Journalist, Association of TV Journalists and Photographers Journalists Association in Karachi.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com