Term Life Insurance Articles
Ways To Misunderstand Your Term Life Insurance Quote
2010-12-23
When you look at a life insurance quote, it's easy to miss the point of certain sections or a term or two. The problem is that these small misunderstandings can change the value of your insurance policy, and in some instances, they can affect coverage and premiums in a major way. Every policy buyer should take the time to make sure that he or she doesn't misunderstand term life insurance terms and conditions, and reading over a quote properly is the first step towards fully understanding the product that you're buying.
A major point of confusion for many policy buyers is the part of their contracts that explain how and whether premiums are returned. Most term life insurance policies won't return premiums to policy holders, but it can be easy to think otherwise when scanning through a term life insurance quote. Even the coverage types that do offer premiums back (notably return of premium or ROP policies) have very strict guidelines that need to be followed in order to receive a return. Term life insurance contracts also have special clauses in many instances that detail situations in which premiums could be returned. Reading these clauses is essential, but you'll misunderstand term life insurance policies if you assume that they're all the same.
This is also true with exclusions in many contracts. Exclusions are terms which prohibit a full payout of death benefits in certain circumstances, and many policy buyers skip this section or assume that it doesn't hold anything that won't apply to their policies. Exclusions may prevent payout from deaths in foreign countries, extreme sports, or due to certain occupations, so it's always helpful to carefully read through this portion and make sure that you understand it.
One good way to ensure that you fully comprehend your term life insurance quote is to read each quote along with an insurance glossary. These glossaries are available for free online, and many are created by major term life insurance companies. Glossaries are very convenient because they provide definitions of common terms used in term life insurance contracts, ensuring that you don't mistake one word for another. They're a tremendous resource, but they're the most useful when you're able to either print a glossary off or keep it open in another browser window while you read your term life insurance quote. You can also keep in contact with your insurance agent to avoid any misunderstandings, but make sure to take some action to understand your term life insurance quote, as it will pay off greatly in the long run.
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When you look at a life insurance quote, it's easy to miss the point of certain sections or a term or two. The problem is that these small misunderstandings can change the value of your insurance policy, and in some instances, they can affect coverage and premiums in a major way. Every policy buyer should take the time to make sure that he or she doesn't misunderstand term life insurance terms and conditions, and reading over a quote properly is the first step towards fully understanding the product that you're buying.
A major point of confusion for many policy buyers is the part of their contracts that explain how and whether premiums are returned. Most term life insurance policies won't return premiums to policy holders, but it can be easy to think otherwise when scanning through a term life insurance quote. Even the coverage types that do offer premiums back (notably return of premium or ROP policies) have very strict guidelines that need to be followed in order to receive a return. Term life insurance contracts also have special clauses in many instances that detail situations in which premiums could be returned. Reading these clauses is essential, but you'll misunderstand term life insurance policies if you assume that they're all the same.
This is also true with exclusions in many contracts. Exclusions are terms which prohibit a full payout of death benefits in certain circumstances, and many policy buyers skip this section or assume that it doesn't hold anything that won't apply to their policies. Exclusions may prevent payout from deaths in foreign countries, extreme sports, or due to certain occupations, so it's always helpful to carefully read through this portion and make sure that you understand it.
One good way to ensure that you fully comprehend your term life insurance quote is to read each quote along with an insurance glossary. These glossaries are available for free online, and many are created by major term life insurance companies. Glossaries are very convenient because they provide definitions of common terms used in term life insurance contracts, ensuring that you don't mistake one word for another. They're a tremendous resource, but they're the most useful when you're able to either print a glossary off or keep it open in another browser window while you read your term life insurance quote. You can also keep in contact with your insurance agent to avoid any misunderstandings, but make sure to take some action to understand your term life insurance quote, as it will pay off greatly in the long run.
