Did you know that most people never open their life insurance policy once it has been delivered to them? This may be mostly, or in part, due to the fact that the terms are difficult to understand. However, in an age where information rules, it is increasingly important to become familiar with your life insurance policy and all it has to offer.
Let’s take a look at some things you can do to better understand your personal life insurance policy.
Know the terms -Life Insurance Policy
You may find yourself questioning every other word in your life insurance policy. You’re not alone. Most people don’t know the key terms used in life insurance underwriting. However, there is help. Most insurance companies provide an appendix of terms somewhere in the policy or on their website. If not, you can always pull out your dictionary.
Know Your Provisions
Most people never know or soon forget the benefits available in their life insurance policy. For instance, if you have a Whole Life insurance policy, you can borrow against the cash value you’ve built up in your greatest time of need; and if you have Variable Whole Life, you have control over your stocks.
Many life insurance policies have provisions that can be used during your lifetime, so it is important to know the support you have.
Know Your Exclusions
Most life insurance policies have lots of fine print, and a good number of exclusions to go with them. You must know the limitations of your life insurance policy and share that information with your beneficiary so they can adequately prepare.
Review Your Policy Often — Over time, your life may change, creating the need for different provisions in your insurance policy. Sit down and re-evaluate your life insurance policy every five years to determine whether your provisions still meet your needs. If you find that your policy no longer meets the needs of you and your heirs, you have the option of using a Rider to increase or decrease the amount of your policy.
Tip:– Life Insurance Policy
Never “trade-up” for a better policy when you need to make adjustments. As you get older, the cost of insuring your life goes up. If you initiate a new policy, your premiums will follow suit and deplete your cash value.
Ask Questions — Remember the old adage, “The only stupid question is the one that goes unasked”? This is especially true in life insurance. Once you receive your life insurance policy make a copy and highlight every term, keyword and provision you do not fully understand. Call your agent and set up an appointment to go over your questions.
Your agent will have the satisfaction of knowing you received the service you needed and you will have the peace of mind that your policy is what you envisioned after all. Remember, your life insurance policy is not only cash value on your life, it is the financial future of your heirs.
Understanding your policy can eliminate issues early on that may affect the benefits your heirs receive.