With life insurance companies making obtaining life insurance policies easier, more and more consumers get coverage. There are several things policyowners and beneficiaries need to know when buying life insurance.
1. No Medical Exam Does Not Guarantee Automatic Payout in the Event of Death
Today many insurers offer policies for lower benefit amounts (usually less that $400,000) without a medical exam.
What consumers need to know is that no requirement for a medical exam does not mean that benefits will automatically be payable in the event of death.
Many companies request pharmacy records and check all medications prescribed to an insured. In addition, questions on an application for life insurance ask about an applicant’s medical history and background.
Life insurance policies have a provision that states that if an insured dies within the first two years of the policy effective date, the insurance company has the right to contest the policy – check the insured’s medical history and background to ensure that all questions on the life insurance application were answered correctly.
If the insurer finds that there was a misrepresentation on the application, life insurance benefits will be denied.
2. Low Premiums
Life insurance premiums are now lower than several decades ago.
This is due to aggressive competition among insurance companies. New technologies allowed life insurers to cut administrative costs and those savings result in lower premiums for consumers.
However, a quote from an insurance company is usually based on a healthy individual and the required premium may be higher once the individual provides the insurance company with his medical history.
Consumers should exercise caution when applying for life insurance coverage. Specifically, they need to make sure that the low premiums quoted by an insurer will buy them the policy that will suit their financial needs.
3. Living Benefits
Many life insurance policies now have new living benefits riders that pay a certain amount of money to policyowners while they are alive.
The accelerated death benefit rider allows a policyowner to use up to 75 percent of the life insurance coverage in case of a terminal illness and a shortened life expectancy.
The chronic illness rider allows a policyowner to use up to 90 percent of the coverage amount if a policyowner suffered a critical health condition, such as cancer, heart attack, stroke, a major organ transplant, renal failure, ALS, blindness, or paralysis of two or more limbs.
Approval of a living benefits claim requires satisfying the insurer’s requirements for providing proof of a critical illness. A claim for living benefits may be denied if the policyowner does not submit the required documentation on time.
When applying for life insurance coverage that has a living benefits rider, an individual should review the policy language carefully to make sure he understands the requirements for receiving living benefits.
If you have problems with getting a life insurance claim approved, call us for a free consultation. We handle denied and delayed life insurance claims, as well as accelerated death benefit and living benefits claims.
Call (888) 510-2212 for a free consultation.
