The more you know about something, the better able you are to take full advantage of it benefits. This is true for a lot of things in life, and also applies to life insurance. There are some things that your life insurance company is unlikely to mention to you when you purchase your policy.
Your life insurance company isn’t likely to point out to you that their company has a habit of not really putting much effort into looking for your beneficiary after you are gone. Authorities in California are investigating some insurance companies because those companies failed to notify a beneficiary and also failed to turn funds over to the state government in a timely fashion.
Essentially, this means that the death benefit payouts were not going to the intended beneficiary. You can prevent this from happening to your family by making it absolutely clear exactly who the beneficiary, (or beneficiaries), or your life insurance policy is.
Have a talk with that person (or people). Make sure the beneficiary has the name of your insurance company, and the policy number of your life insurance. They may need to contact the company after you pass away, in order to receive the money you want them to be able to have.
Your life insurance company probably won’t mention that to you that they rarely have to actually pay up on a life insurance policy. Each year, one out of every fourteen people who purchase a life insurance policy stop paying their premiums. If you stop paying the premiums then you lose coverage.
There is a misconception that many consumers have about life insurance. Some people feel that since they did pay their premiums for a while that the policy should pay something out to the beneficiary. This is simply not the case. You can prevent this from happening if you make absolutely certain that you keep paying your life insurance premiums on time.
Did you know that you don’t necessarily have to submit to a medical exam in order to get a life insurance policy? Your life insurance company probably didn’t tell you about that, either. They use the medical exam as a way to figure out how healthy you are, and to determine how likely it is that they will end up paying out the death benefit.
If you skip the medical exam, then the insurance company cannot get a clear idea about how healthy you really are. So, to make up for their potential risk, they are going to charge you a much higher premium than you may have gotten if you submitted to a medical exam in the first place. Your insurance company might not be making that extra cost very clear to you, either.
Image by Dustin Moore on Flickr