Frequently Asked Questions
When will a Life Insurance Not Payout?
The life insurance is a contract, which might not pay out to the beneficiary on grounds of certain circumstances. Usually, these exclusions to the payment of the policy are usually given in the fine print. Therefore, some of the situations which result in nonpayment of the benefit are given below:
Suicide is a common situation that leads to the nonpayment of death benefits of life insurance. This, however, varies according to the state, and if there is a suicide clause in your state, your death benefit won’t be paid to your beneficiary, however, if your policy lacks the suicide clause, in case you commit suicide, your beneficiary will be paid your premiums without your death benefit. The suicide clause which is an incontestability clause is a window of time in which the insurance company can investigate and deny claims was added as protection to insurance companies for policyholders who take on a large insurance policy, then commit suicide to ease the financial condition of their families.
- Dangerous Activities
If you are constantly engaged in dangerous activities, your claim to life insurance might be denied, as your engagement puts you at a higher risk. Therefore, there are certain clauses which prevent athletes from participating in activities which are classified as dangerous for the sake of their policies.
- Unhealthy Lifestyle
The incontestability clause also works in a situation if you were somehow less than forthright about your past unhealthy habits, such as smoking or if you in a way forgot to mention that you have a condition like high blood pressure. If the insurance company discovers otherwise during this between the two-year period, it has the right to cancel your policy. Hence no benefit would be paid.
- Illegal Activities
Insurance companies can refuse to pay your benefit if you are engaged in illegal activities like robbery, stealing and so on. And even in some events that lead to death, in case of trespassing, your benefit might not also be paid as trespassing is a crime. Thus, if a death occurs when a policyholder dies of a heart attack while being chased by a dog in a compound, a payout may be withheld.
- Living Outside the United States
If you took a policy while you are in the United States and you leave to stay in another country, the insurance company may not pay the benefit if there is a term in the agreement that speaks about it. Therefore, be careful to examine the terms of your policy on this subject, most especially if you are thinking of living outside the United States in years to come.
- War Deaths
Insurance policies are not designed to leave military men who are always engaged in war affairs out but certain insurance policies have an Art of War exclusion. This exclusion doesn’t pay out for deaths of civilians due to war or the death of people whose jobs take them to war zones such as journalists.
- Fraudulent Practices
After death, insurance companies investigate the cause and if irregularities and frauds are discovered, payments of claims might not be made. Thus, always remember that in insurance, honesty is always the best policy!
I’m a homemaker, can I get a life insurance with a good coverage?
Yes, homemakers qualify for an equal amount of life insurance as their working spouses because of the role they play in raising children. If an undesired event occurs, the working spouse many be forced to start looking after the children and work less, and a good death benefit from the insurance of the home maker can help keep things in balance in the case that the working spouse has to take the burden of taking care of the children after the demise of the homemaker.
Can I get a life insurance while I’m pregnant?
Yes, you can and generally, pregnancy makes many women withdraw from smoking and drinking and this makes them even healthier, thus putting you in a good state for the medical assessment. The underwriters will take your pregnancy into account while drawing up the premium you’ll pay.
Can I get a life insurance with preexisting conditions?
If you have greater health risks, obtaining traditional insurance policies might prove difficult, but there are some policies that do not require a medical exam which you can easily applied for.
However, with some conditions such as type II diabetes, high cholesterol and high blood pressure, you may still be able to obtain the insurance if you are being well monitored under a doctor, yet the premiums may be higher than for people without health conditions.
How do I increase my coverage?
This is not allowed normally, therefore, you should select the best coverage for you at the time of application and the longest term you wish to be considered for. However, changes in increasing the coverage can be allowed by purchasing a new policy.
On the other hand, you are allowed to decrease your total coverage amount or term length, this, however will result in a lower premium (Depending on carrier guidelines).
Is there room for automatic payment?
Yes, many people select this option to avoid cancelation of policy due to non-payment. However, if you do not want this option, you can receive a bill in your mail especially, if you wish to pay on a quarterly, bi-annual and annual basis.
How long does it take to get a policy?
There are different policies and each policy could take between 1-3 business days if no medical exam/instant issue life insurance, and traditional life insurance has a lot of activities that are involved in their process of obtainment from commencement to finish can take anywhere from2-8 weeks.
Can I replace my insurance policies?
Depending on what you need, you might need to replace your insurance policies, however, it is best for you always apply for and secure a new policy before you cancel a previous one which you have had running.
What is a paramedical exam?
It is the exam required to obtain the relevant information about your medical history. It is a general assessment of your body which would be used for assessing your eligibility for the policy you wish to obtain which usually will consist of blood sample, urine sample and on occasion EKG.
Group life VS Individual life?
Group life insurance is usually offered by the employer and are usually cheaper, while the individual life insurance is purchased out of work. It is better to have an individual life insurance even if you have a group insurance as group insurances only gives you coverage as long as you are working with an employer and when your employment ends with the employer, your insurance also similarly ends.
How much coverage will I qualify for?
You can get up to 20 times your annual income in coverage. However, coverage generally decreases as your age increases, and similarly as retirement approaches. However, the coverage can even be greater than 20 times your income if you have assets to protect you over your income.