A life insurance policy can provide your family with some financial protection that will help them to continue paying the bills after you have passed away. You can learn some very important things about your life insurance policy by reading over your annual notice of policy status. You might think of it as the “Cliff’s Notes” version of your life insurance policy.
Most people don’t like to think about life insurance because you cannot do it without acknowledging that you, and your spouse, are going to someday pass away. While it can be uncomfortable to consider this serious topic, it is important to address it. A life insurance policy provides financial protection for your family after you have passed away.
It is possible to share a health insurance policy, or a car insurance policy, with your spouse. Life insurance, on the other hand, doesn’t work that way. You each will need to purchase a separate policy. Every year, you will receive an annual notice of policy status statement. There is a lot that you can learn about your life insurance policy by reading it over.
The notice of annual policy statement will show the date that you originally purchased the life insurance policy. It will show you if you have any payments that are due, and if so, what the due date is. You can find out the cost of your monthly premium and your annualized premium. In some cases, one of these options may work out to be more frugal than the other one.
Some life insurance policies accrue cash value as the policy ages. In that case, the annual notice of policy statement will tell you how much the policy is currently worth. If it doesn’t accrue value, then it will say something like “your policy has no cash value” and it will tell you the cash surrender value if you chose to close the policy today.
One of the most important things you can learn from your life insurance annual notice of policy status is the insurance amount that the policy will pay out as a death benefit. It should also say the name of the plan. These two items are what you need when making arrangements with your insurance company after your spouse has passed away.
You will also want to read the annual notice of policy status to confirm that the person, or people, that you have selected as beneficiaries to the policy are who you want them to be. There could be a primary and secondary beneficiary.
If you want to keep the current beneficiaries, then you don’t have to do anything. If you want to change them, you need to contact your life insurance company to get that process started. This usually requires you to fill out a form, and to send the form back to the insurer. My annual notice of policy status has this reminder: “A change in marital status could necessitate a new beneficiary designation. Please contact your agent if your marital status has changed.”
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