Life Insurance Guide
Life insurance, also called life assurance, is a greyish area for a lot of people. Speaking for myself – I did not have a life insurance plan in place until my 30th birthday! Luckily I had no need for such a plan before then, but what if I hadn’t been that lucky?
I believe that if people have a better perception of what life insurance coverage entails and the advantages associated with it, a lot more people when acquire life assurance to protect their future!
Let us take a look at a couple of life insurance terms and phrases.
A is for agent. An agent is an official individual associated with a specific insurance carrier and will therefore be able to sell you services and contracts for a specific insurance provider.
B is for beneficiary. A beneficiary is the person who is nominated to receive the benefit when the insured dies. A husband will usually obtain a life insurance policy which will look after his wife and family members once he’s no longer there to take care of them.
C is for contingent beneficiary. If an original beneficiary of n policy is not alive when the policy is going to pay out, a contingent beneficiary will be called to receive the proceeds of the policy. A good example of this is where a husband nominates his wife as first beneficiary, but if the couple are both killed in a car accident, their kids might obtain the proceeds.
D is for death benefit. The death benefit is the total amount of money that will be paid to the nominated person once the insured (the policy holder) dies.
E is for exclusions. All insurance policies, regardless of whether it’s short-term insurance or long term investments for example life assurance, will stipulate certain scenarios or circumstances in which case a policy will not compensate. It is crucial to be fully aware of all such exclusions to make sure that a policy will pay out when it should.
F is for final expenses… Final expenses are expenses that are incurred at the time of a person’s passing on. This could include everything from funeral expenses to court expenses and income taxes.
G is for grace period. Do not forget that should you not pay your policy, the insurance company has the full right to cancel your insurance cover. Usually there is a period after the payment date of your premium where you will still be protected. This will care for you in the unexpected event that your salary might be paid late or a similar scenario, where you might not be able to pay your premiums on the required date. Make sure that you are familiar with the grace period.
H is for. (Sorry, but I cannot seem to find any life insurance term that starts with an H!). H could possibly be for “How can you still be going about doing your daily duties without having life insurance in place?”
Life insurance, life assurance, life policies. call it what you would like, but just be sure you have your insurance in place!
For more information about life assurance visit the website http://www.insurance.co.za
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