Top 5 Things To Know About Your Term Life Insurance Policy
Term life insurance provides protection for your family and loved ones should you pass away during the term period you have chosen. While on the surface term life insurance may come across as a very simple type of life insurance there are some important factors you should keep in mind. Here is my “Top 5” list:
1. Do you have a level term life insurance policy? Level means that the premium you are approved for will stay the same for the term period you have chosen. This is very important because most people I speak with want to know they have a fixed price for the period they have chose and they don’t want to worry about it increasing during the term period.
2. Does it have the Accelerated Death Benefit Rider? This rider would allow you to take a percentage of money out of the term life policy if you were certified by a doctor to be terminally ill. Usually this means having 12 months or less to live. There is a fee to utilize this option and the amount you take is deducted from the death benefit so your beneficiaries will get what is left. Always make sure you fully understand how this or any other rider works!
3. What is the grace period? Most insurance carriers allow a certain number of days where they will allow the premium payment to be made, after the due date. If payment is not received within this grace period, your policy will lapse and coverage will be canceled. Each carrier’s rules and time frames are different so make sure you understand what the grace period is for your policy.
4. Is a child term rider available?. This is a great way to cover yourself and your minor children. We all hope that nothing ever happens where a child passes away prior to a parent but just having the added protection on your children will give you more peace of mind just in case the worst case scenario happens. Coverage amount for child riders vary from company to company and the additional cost to add children under a child term rider is usually a very low amount.
5. Monthly EFT payments and your Address. If you pay by electronic bank draft each month and you change banks DON’T FORGET to call your insurance company in order to update your banking information. I’ve spoken with many clients over the years that lost their coverage because they changed banks, did not update their life insurance carrier and thought they still had coverage not realizing the policy ended up being cancelled. Also, if you move you need to update your address with your insurance carrier otherwise they will send notices to your old address and if they can’t reach you, the policy may end up being cancelled if they have not received a payment and it’s after the grace period.
About the author: Dan Cody has been in the life insurance business for over 7 years. He loves playing a variety of instruments including the guitar, bass, drums, and piano. He also supports cancer research foundations and volunteers at local pet shelters. Dan enjoys helping customers understand life insurance, so they can find a solid policy that fits their needs. You can reach Dan at 1-800-651-1953 or DCody@Pivot.com.