LIFE INSURANCE – HOW IT WORKS
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HOW DOES LIFE INSURANCE WORK?
Life insurance is a contract you make with an insurance company. You choose the type of life insurance you want, such as whole life and term life insurance, and any supplemental life insurance, such as accidental death insurance. Once your insurance broker reviews your selections and your application, they give you a premium amount you must pay regularly. In return, the insurance company will pay a lump sum, also known as a death benefit, to your insurance beneficiary in the event of your death.
WHO IS ELIGIBLE FOR LIFE INSURANCE?
Anyone that meets the eligibility requirements. However, health problems are a common reason why someone might be denied life insurance coverage. That is why it is always essential to get insurance while you are young and healthy.
WHEN DOES MY LIFE INSURANCE COVERAGE BEGIN?
Your life insurance coverage begins on the effective date as long as you have paid your initial life insurance premium.
HOW LONG DOES IT TAKE FOR LIFE INSURANCE BENEFITS TO BE PAID?
Once the beneficiary has submitted a claim and all relevant paperwork, and if the claim for death benefits is not contested, most people can expect to receive the benefits within 60 days.
HOW IS A DEATH BENEFIT PAID TO A BENEFICIARY?
Many insurance companies offer a single lump-sum payment or annuity-based payments. A lump-sum payment pays the entire death benefit at once, whereas an annuity payout is similar to an installment plan. Instead of receiving the whole death benefit at once, you would receive smaller benefits across an extended period of time.
CAN I SELL MY TERM LIFE INSURANCE POLICY?
You can only sell your term life insurance policy if the policy is convertible into permanent life insurance. Once it has been converted, a life settlement provider would then make an offer based on certain factors such as your health status, age, and death benefit.
WHY WOULD SOMEONE WANT TO SELL THEIR LIFE INSURANCE POLICY?
Someone might decide to sell their life insurance policy to help cover medical bills or pay for long-term care. Sometimes these situations are unavoidable. Other times, they might have been avoided with the right insurance coverage and financial planning.
I DON’T HAVE A FAMILY YET – WHY DO I NEED LIFE INSURANCE?
Just because you don’t have a family today doesn’t mean you won’t have one tomorrow or even ten years from now. The best time to buy insurance is when you are young and healthy so you can capitalize on lower premiums and more benefits.
SHOULD I GET LIFE INSURANCE FOR MY CHILDREN?
Yes – but not for the reason you might think. While life insurance is typically known as a way to provide for dependents in the event of your passing, getting life insurance for your children early on means that they will be covered regardless of future health issues. If the term life insurance policy covers your child for 20 years, that is a long time for health problems to arise. It also means you are locking in a lower premium for them, which they will thank you for when they are the ones paying the bill.
SHOULD MY SPOUSE HAVE LIFE INSURANCE?
Everyone should have life insurance! And when you get life insurance through Woligo, it is easy to add your spouse to your life insurance policy with an additional insured rider.
WHERE CAN I LEARN MORE ABOUT LIFE INSURANCE?
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