VIEWS: 1 PAGES: 1 POSTED ON: 6/26/2011
Having life insurance is mandatory for anyone that has another person depending on them, financially or emotionally. Now, before you can apply for a life policy, you need to understand how the life insurance industry operates. Life insurance is not difficult to understand at all. There are 2 entities involved in each and every life insurance policy process, namely the insured, the company you'll obtain the life policy from, and the insured, the individual that owns the policy, in this case you. You, the insured or policy holder, agrees to pay a small amount of money for a fixed period of time. This amount is called a policy premium. In the regrettable event of the policy holder dying during the policy period, the insurance company will pay out the policy amount to the beneficiaries nominated by the policy holder.A life policy is much like a legal agreement. There are certain clauses to agree to. For example, in the event the insured should commit suicide within the first two years of having the policy, the insurance company is not going to pay out the claim. Or if the insured furnishes facts that are found to be incorrect, the insurance company can declare the policy void.Policies are priced in a way that they cover claims to be paid, admin expenses and of course, they need to make some revenue. So, for each individual that applies for a policy, a professional called an "actuary" determines the individual's mortality table. They do this by considering the person's age, gender, wellbeing, interests and habits. Your family health background also plays a role when determining what the person's life policy premium will be.This investigation done by the insurance company is known as underwriting. They will investigate the life policy applicant's life by analyzing their family history, health and lifestyle. If the company find the applicant to be too much of a risk to insure, they will not give them a policy. The company will, if the individual is a high risk, but still insurable, hike their monthly premiums due to the high risk.Despite the fact that different insurance companies will have different stipulations, they all have specific standard industry clauses as well, like the beneficiary clause. The clause declares that only the policy holder can change, remove or add beneficiaries onto their policies, for obvious reasons of course. Nonetheless, all insurance providers have terms and conditions and it is crucial that you read and understand these clauses.Upon the insured's death, the insurance company requires a proof of death certificate before proceeding with settlement. If the insured's death is found to be suspicious by any means, the insurer may choose to examine the death. If there are no signs of foul play, the insurer will pay the claim to the beneficiaries in approximately Two weeks.Obtaining a life policy is an important part of each and every person's life and should not be ignored. There are ways to make your policy premium more affordable, but always make sure that you are properly insured, as being under insured can have destructive implications.
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