Things To Do With Life Insurance Policy

A life insurance policy is an agreement or a contract between the insured and a life insurance company. It is put in effect once the insured agrees to the terms and conditions given. The insured will be required to pay a certain amount of money to the insurance company. In case the insured dies, death benefits are given by the insurer to the person given as the beneficiary.

Roles involved are the policy owner, the insured person, the beneficiary and the insuring company. The first three roles can be played by one individual. One policy can cover more than one insured person and have several beneficiaries.

The agreement stipulates that the insurer must pay death benefits to a beneficiary once the holder is dead. For this to happen, the policy must still be in force when the insured individual dies. Am policy is kept in force when the insured maintains payment of premiums to the insuring company.

There are three types of this policy. One is the the whole life, the second is the term life and the third is the universal life.

term life insurance is mostly a fixed policy. By fixed it means that its premiums are fixed, paid on a schedule basis and the period of cover is also fixed. If the insured person dies within the period the policy is in force, death benefits will be paid.

The whole life policy also needs the insured to be paying fixed premiums on a fixed schedule. But in this policy, coverage is guaranteed for and up to a certain age normally up to a hundred years. The insurance company must pay death benefits even in cases where the holder outlives the policy. This policy has cash value meaning it can be liquidated.

By choosing the universal life policy, an individual is allowed to pay any premium amount at any time. The maximums for this policy are given by the government. There is no limit to the cover period under this this policy. This policy has cash value too meaning it can also be liquidated.

to buy a life insurance policy, the following steps are followed. The first is to compare quotes from different insurers. The second is to completing an application form. Here the company offering this policy will assist to fill in the forms through a conversation used to gather all the required information. Then to determine the insured persons mortality risk, the company will have to conduct a thorough medical check up. After that the insured to be waits for underwriting then if the insurer accepts they send an offer that the insured signs to put the policy in force.