If you try to read your life insurance policy without an insurance agent, you’ll probably barely make it through the first page. Life insurance policies usually include a number of words that are difficult to understand. As always, Tracy-Driscoll is here to help you learn the jargon, so that you can make better sense of your life insurance policy and ensure you’re adequately covered.
Beneficiary – The person who receives the proceeds of a life insurance policy after the insured dies; primary, secondary and tertiary beneficiaries refers to the order in which beneficiaries receive the payout.
Medical Examination – The exam required before the insurance company can issue a policy, it’s usually conducted in-home by a licensed paramedical professional.
Nearest Age – An insurance company uses your nearest age when determining premium costs. For example, if you are 27 years and five months old, you would be claimed as a 27-year-old on the policy.
Non-Medical Term Policy – This type of policy does not require a medical exam. Your insurance company will ask applicants a few questions about your age and past physical health before making a decision on coverage options.
Preferred Risk – The applicant’s physical health, occupation and other characteristics indicate that he or she will live longer than other people of the same age.
Premium – Is the payment someone makes to pay for their life insurance policy.
Rider – Is an add-on to your policy that expands or waives a coverage or condition of the policy. Typical riders include Accelerated Benefits, Accidental Death and Dismemberment, Accidental Death Benefit, Disability Income, and Other Insured.
Smoker Ratings – Is assigned to applicants based on whether or not they have smoked in the past 12 months, which affects the policy premium.
Standard Risk – The applicant is entitled to insurance coverage without extra ratings or any special restrictions.
Sub-Standard Risk – The applicant has a physical condition, personal or family history of illness or disease, risky occupation or other dangerous habit that could shorten his or her longevity.
Term Life Insurance – Protects the insured for a set term and expires when that term ends.
Underwriter – The company that receives the premiums and accepts responsibility for the life insurance policy contract, the company employee who approves or denies claims or the agent who sells policies
Whole Life Insurance– Provides coverage until the policyholder dies rather than for a set term, also provides tax-deferred accrual of cash.
Now that you have a better understanding of the many terms that you’ll come across in your life insurance’s policy, Tracy-Driscoll wants to help you review it. Our insurance professionals want to make sure that you have the proper coverage for your needs. Did you know that you should review your policy at least once a year? Give us a call at 860-589-3434.