Term Life Insurance Articles
Looking At The Fine Print Of Your Term Life Insurance Policy
2010-01-10
Understanding your term life insurance policy is incredibly important. Doing so will help you ensure low rates, dependable payouts and good value to your policy. Unfortunately, many consumers don't think about their policies after they purchase them. However, doing so can lead to some nasty surprises down the road. Whether you're looking for a term life insurance quote or you've owned a policy for some time, it's well worth the time and effort to take a look at your contract and understand the fine print as it relates to your coverage.
Start at the beginning of your contract and pay special attention to any portions that determine your premiums and any exclusions. Most term life insurance policies guarantee a set premium for some time, either through the life of the policy or for a certain number of years. However, the so-called small print may detail a rise in your rates if you should take a dangerous career, if you develop long-term health problems, or if you add or remove beneficiaries. Laws on insurance vary from state to state, so it may be advantageous to also look at your state's life insurance laws to ensure that any premium changes made to your policy is considered legal.
Also pay close attention to exclusions. These terms explain situations in which your insurer will not pay out your policy's coverage to your beneficiaries. Common exclusions relate to dangerous activities. For instance, if you die while bungee jumping, many term life insurance policies will not pay out. Exclusions can also get more general. If your insurer didn't require you to get a physical before your coverage started, your beneficiaries may be denied a payout due to a pre-existing medical condition.
Your term life insurance contract may be extremely long, and it's invariably filled with legal language that laypersons may not understand. That's not necessarily a bad thing, but it also doesn't excuse you from taking a few steps to learn how your policy works (and more importantly, any factors that can increase your premiums or prevent a life insurance payout). Your life insurance agent will usually be more than happy to explain anything that you don't understand, and can help you avoid mistakes and lifestyle choices that can lead to trouble. Call your agent, or if possible visit his or her office, and bring a copy of your contract. Highlight anything in the small print that seems confusing, and anything that alarms you. Be willing to cancel your policy if the fine print is too distressing - there are hundreds of companies offering worthwhile term life insurance policies at great rates. There's no reason to sacrifice your coverage due to a contract.
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Understanding your term life insurance policy is incredibly important. Doing so will help you ensure low rates, dependable payouts and good value to your policy. Unfortunately, many consumers don't think about their policies after they purchase them. However, doing so can lead to some nasty surprises down the road. Whether you're looking for a term life insurance quote or you've owned a policy for some time, it's well worth the time and effort to take a look at your contract and understand the fine print as it relates to your coverage.
Start at the beginning of your contract and pay special attention to any portions that determine your premiums and any exclusions. Most term life insurance policies guarantee a set premium for some time, either through the life of the policy or for a certain number of years. However, the so-called small print may detail a rise in your rates if you should take a dangerous career, if you develop long-term health problems, or if you add or remove beneficiaries. Laws on insurance vary from state to state, so it may be advantageous to also look at your state's life insurance laws to ensure that any premium changes made to your policy is considered legal.
Also pay close attention to exclusions. These terms explain situations in which your insurer will not pay out your policy's coverage to your beneficiaries. Common exclusions relate to dangerous activities. For instance, if you die while bungee jumping, many term life insurance policies will not pay out. Exclusions can also get more general. If your insurer didn't require you to get a physical before your coverage started, your beneficiaries may be denied a payout due to a pre-existing medical condition.
Your term life insurance contract may be extremely long, and it's invariably filled with legal language that laypersons may not understand. That's not necessarily a bad thing, but it also doesn't excuse you from taking a few steps to learn how your policy works (and more importantly, any factors that can increase your premiums or prevent a life insurance payout). Your life insurance agent will usually be more than happy to explain anything that you don't understand, and can help you avoid mistakes and lifestyle choices that can lead to trouble. Call your agent, or if possible visit his or her office, and bring a copy of your contract. Highlight anything in the small print that seems confusing, and anything that alarms you. Be willing to cancel your policy if the fine print is too distressing - there are hundreds of companies offering worthwhile term life insurance policies at great rates. There's no reason to sacrifice your coverage due to a contract.
