The goal of life insurance is to provide a measure of financial security for your family after you die. A life insurance policy will help them meet the financial needs that your income would have normally covered. Life insurance can be purchased on an individual or group basis. Most group life insurance is purchased through an employer group and is usually term coverage that
is renewed yearly. Show
Assessing Your Needs Before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents or survivors. For example, who will be responsible for your funeral costs and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage payments, or college? You should reevaluate your life insurance policies annually or whenever you experience a major life event such as marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business. Following are examples of factors you may want to consider at various stages of your life:
Types of Life Insurance Policies There are two basic types of life insurance policies:
Term Life InsuranceTerm life insurance is coverage you buy for a specific time period, such as 1, 5, 10, or 20 years, or up to age 60 - 65. Term life insurance has five key features:
Whole Life Insurance
Whole Life Policies with Investment Features
Mandatory Provisions All types of individual life insurance policies sold in Illinois must contain the following provisions:
What are the provisions of life insurance policy?What Are Life Insurance Policy Provisions? Life insurance policy provisions describe or explain various features, benefits, and conditions of your life insurance policy. Provisions in your life insurance policy also stipulate the rights and obligations of both the insurer (insurance company) and the insured (you).
Which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled?A payor benefit provision is a provision under which premiums are waived in the event the policyholder becomes disabled or dies.
What provision in a life insurance policy states that the application is considered part of the contract?What provision in a life insurance policy states that the application is considered part of the contract? The Entire Contract provision, found at the beginning of the policy, states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract.
What is reinstatement provision?A reinstatement provision is a clause in some life insurance policies that allows the insured to reinstate a lapsed policy provided they meet certain parameters and execute the provision within the specified time frame. Reinstatement provisions most often come into play after a policy has lapsed because of nonpayment.
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