Type Here to Get Search Results !

How to apply for life insurance and Common life insurance terms you should know


How to apply for life insurance

Collect the information you need before you start the life insurance application process. You’ll likely need to provide details about your current and past health conditions, as well as your family’s health history. The insurer may need your consent to get medical records and ask you to take a life insurance medical exam. Insurers also check other sources, such as MIB Group, which collects data on medical conditions, your driving record, and hazardous hobbies.

When you choose life insurance beneficiaries — the people who will receive the payout when you die — be sure you have their Social Security numbers and dates of birth. You may also have to answer questions about criminal convictions and driving violations, such as a suspended driver’s license or DUI, particularly if they happened within the past few years. With some insurers, you can apply online and get instant life insurance. If approved, your coverage could go into effect the same day.

Common life insurance terms

You might come across these terms when you’re shopping for life insurance. Here’s what they mean.

  • Beneficiary: The person or people you select to get the life insurance payout when you die.
  • Carrier: Another name for a life insurance company.
  • Cash value: Permanent life insurance policies typically have an investment portion that increases in value over time. This is known as the cash-value account, and once you’ve accumulated enough cash value, you may be able to borrow against your policy.
  • Death benefit: The amount of money the insurer will pay out to your beneficiaries, generally tax-free when you die.
  • Dividend: Some insurers are mutual companies, which means they’re partly owned by their policyholders. They may pay out a sum of money to some policyholders each year based on the company’s financial performance. These payments are called dividends.
  • Exclusions: The circumstances in which your life insurance policy won’t pay out, such as death from a risky activity like skydiving. Exclusions vary among insurers and are listed in the policy documents.
  • Face value: The basic death benefit of the policy. For example, if you purchase a $500,000 policy, its face value is $500,000.
  • Policyholder: The person who owns the life insurance policy.
  • Premium: The amount of money you’ll pay to keep your life insurance policy active. With most policies, you have the option to pay monthly, quarterly, semiannually or annually.
  • Rider: A life insurance rider is an optional add-on that can be used to customize your coverage.
  • Underwriting: The process an insurer uses to gather information about you and set your life insurance premium.

Post a Comment

* Please Don't Spam Here. All the Comments are Reviewed by Admin.

Top Post Ad

Below Post Ad