Term Life Insurance Articles
Guaranteed Insurability And How It Helps Prevent Life Insurance Coverage Gaps
2010-05-17
Because we cannot defy certain tragedies and catastrophes, we must come up with a way to deal with the consequences. Insurance is one way to compensate for financial losses to our home, vehicle, health, or even from death. An insurance policy is a legal contract drawn up between two parties; the insurance company and the insured. The insured agrees to pay a monthly or yearly premium in exchange for insurance coverage should a claim need to be filed. Life insurance is the most important type of insurance as it helps to pay off outstanding debts and provides future income for remaining family members.
Term life coverage will provide insurance for a specified amount of time and once that time period is up, the insured can allow the policy to expire, re-apply for another term insurance policy, or convert the term to a whole life policy. A good suggestion is to add a guaranteed insurability rider. Guaranteed insurability means that the insured can purchase additional insurance products without having to take another medical examination or provide other proof of insurability. Normally, this is added to an existing policy as a rider and is most beneficial to young families who have accumulated large amounts of debt. As financial obligations change, the insured can also change insurance coverage without having to go through the hassle of proving insurability.
This rider can help prevent life insurance coverage gaps in a number of ways. The insured can buy insurance during specific times, usually upon a certain anniversary of the policy. The time could be every 5 or 10 years, or at anytime before a set age, such as 40 or 45 years old. A major life event can also qualify the insured to purchase more insurance without requiring proof of availability. A major life event could include being married or the birth of a child. If a policy does happen to lapse, there is usually a grace period of 30 or 31 days. During this time, the insured can have the policy re-instated without losing coverage. If the gap is longer than this, he or she can re-apply for the insurance and still be guaranteed coverage.
It is important not to let your term life coverage expire or lapse if you do not have this rider attached. If you have to agree to another medical examination, your health status may have changed since you first applied for insurance, resulting in higher premiums or being declined for another policy. Guaranteed insurability helps you clear this hurdle and secure more insurance to protect both you and your family. Always inquire with your insurance agent if you can add this coverage on to your existing policy.
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Because we cannot defy certain tragedies and catastrophes, we must come up with a way to deal with the consequences. Insurance is one way to compensate for financial losses to our home, vehicle, health, or even from death. An insurance policy is a legal contract drawn up between two parties; the insurance company and the insured. The insured agrees to pay a monthly or yearly premium in exchange for insurance coverage should a claim need to be filed. Life insurance is the most important type of insurance as it helps to pay off outstanding debts and provides future income for remaining family members.
Term life coverage will provide insurance for a specified amount of time and once that time period is up, the insured can allow the policy to expire, re-apply for another term insurance policy, or convert the term to a whole life policy. A good suggestion is to add a guaranteed insurability rider. Guaranteed insurability means that the insured can purchase additional insurance products without having to take another medical examination or provide other proof of insurability. Normally, this is added to an existing policy as a rider and is most beneficial to young families who have accumulated large amounts of debt. As financial obligations change, the insured can also change insurance coverage without having to go through the hassle of proving insurability.
This rider can help prevent life insurance coverage gaps in a number of ways. The insured can buy insurance during specific times, usually upon a certain anniversary of the policy. The time could be every 5 or 10 years, or at anytime before a set age, such as 40 or 45 years old. A major life event can also qualify the insured to purchase more insurance without requiring proof of availability. A major life event could include being married or the birth of a child. If a policy does happen to lapse, there is usually a grace period of 30 or 31 days. During this time, the insured can have the policy re-instated without losing coverage. If the gap is longer than this, he or she can re-apply for the insurance and still be guaranteed coverage.
It is important not to let your term life coverage expire or lapse if you do not have this rider attached. If you have to agree to another medical examination, your health status may have changed since you first applied for insurance, resulting in higher premiums or being declined for another policy. Guaranteed insurability helps you clear this hurdle and secure more insurance to protect both you and your family. Always inquire with your insurance agent if you can add this coverage on to your existing policy.
