When you purchase a life insurance policy, you agree to certain terms and conditions. In this post, Bill Schantz discusses what’s included in those terms and what it means for you. He also walks you through some of the common terminologies included in life insurance agreements that you should know about. So, let’s get started!
What’s in Life Insurance Terms & Agreement? Bill Schantz Answers
The document includes important information regarding the coverage, benefits, and limitations of your life insurance policy. It is essential that you read and understand this agreement before signing it.
Some of the key points that are covered in the terms and agreement, as per Bill Schantz, include:
1. The definition of life insurance and how it works.
2. The different types of life insurance policies available.
3. The coverage and benefits that are included in each type of policy.
4. The limitations and exclusions of each type of policy.
5. How to file a claim and what documentation is required.
6. The process for appealing a denied claim.
7. The terms of the policy regarding renewals and cancellations.
8. The contact information for the life insurance company.
10 Terminologies Used In A Life Insurance Agreement That You Should Know About
1. Policy Owner: The person who buys the life insurance policy and pays the premiums is the policy owner. The policy owner has the right to make changes to the policy, including canceling it.
2. Beneficiary: The beneficiary is the person (or persons) who will receive the death benefit if the insured dies while the policy is in force. The policy owner can name or change the beneficiary at any time.
3. Death Benefit: This is the amount of money that will be paid to the beneficiary when the insured dies.
4. Premium: This is the amount of money that must be paid periodically to keep the policy in force.
5. Surrender Value: If a policy is surrendered (canceled) before the death of the insured, the policy owner may receive a surrender value, which is usually less than the total amount of premiums paid.
6. Cash Value: Some life insurance policies accumulate cash value over time. This cash value can be accessed by the policy owner through loans or withdrawals.
7. Loan: A loan against a life insurance policy’s cash value is like borrowing from a bank, except the interest rate is usually lower. The loan must be repaid with interest, and if it’s not repaid, the death benefit will be reduced by the outstanding loan amount plus interest.
8. Withdrawal: A withdrawal from a life insurance policy’s cash value is like taking money out of a savings account. The money withdrawn will reduce the death benefit and may also trigger taxes and penalties.
9. Surrender Charge: If a policy is surrendered (canceled) before a certain date, the policy owner may be charged a surrender fee.
10. Free-Look Period: Most life insurance policies come with a free-look period, says Bill Schantz, which is usually 10-30 days. This is a time when the policy owner can review the policy and decide if they want to keep it or cancel it for a full refund of the premiums paid.
Bill Schantz’s Concluding Thoughts
The life insurance terms and agreement is a critical document that you should read carefully before signing up for a policy. According to Bill Schantz, by understanding the coverage, benefits, and limitations of your life insurance, you can make sure that you are getting the right type of policy for your needs.