FAQ Life Insurance

When you are set to buy a life insurance policy for yourself or anyone in the family, a number of questions pop up in your mind. Answers to these queries are very much required to make you take right decision. Though you may ask  life insurance agents to come to your house and answer your queries, most of the companies have posted on their website answers to the frequently asked questions. Questions other than those listed on the website can be asked while taking up the policy from the agent.  Some of the questions frequently asked by the customers are listed below with their convincing answers.

  • Life Insurance! What is it?
    Life insurance is a policy which once taken protects your family from any financial crisis after the insured death. The plan taken provides financial security to the dependents of the insured. Having the right kind of life insurance policy allows you to have peace of mind and at the same time financial security of your loved ones.
  • How long should be the life insurance coverage?
    The life insurance coverage should be decided based on your need. If life insurance is taken so that your children educational and other needs are provided, then the insurance should be taken for a term you feel the children will become dependent. If the insurance is for spouse the insurance may be taken for whole life.
  • What are riders? What riders I should be getting?
    Life insurance policies come with some riders and each of them is designed to fulfill a concern or need of the insured and its dependents. Some of the most common riders are waiver of premium rider which is taken by those who feel that they may have problems paying the premium. Accidental death rider is for those who have the possibility of getting into an accident. Critical illness rider provides you the assured sum equal or little less than it in case the insured is diagnosed with critical illness. Return of premium rider is for those who feel that they should get something out of the term insurance policy that they have taken.
  • Which is a better option- separate life insurance plan or joint life insurance plans?
    Joint life insurance plans generally covers husband and wife or two individuals. The assured amount goes to any of the surviving spouse and then the coverage for the living spouse also ends. Some policies pay the assured amount only when both the insured dies and the money is given to the beneficiaries. The joint life insurance policy is cheaper than individual plan, but individual plan covers both the individuals and give better security to the beneficiary and hence it is solely the decision of the policy taker to decide which plan to take.
  • Insurance coverage being rejected even when the person tries best to get the coverage?
    The insurance coverage is rejected when the person looking for insurance has short life expectancy. The companies first assess the risk and then provide the insurance policies. In such case the people should look for other ways getting the policy like getting group insurance plan in the company or organization he is working in. One should also look for the reasons why the application was rejected. In case the cause of the rejection is in control of the person looking for insurance like change in the lifestyle, like giving up smoking, then it is advised to go for it.
  • Is Medical Examination compulsory before taking up a life insurance plan?
    Some life insurance policies do not include medical expenses and hence does not require medical examination. Such insurances are for shorter period of time and also the premiums are low. However, some other life insurance policies require medical examination and it helps them decide the premium amount.
  • Is it ok not to disclose some of the information asked in the application form as they are too personal to be disclosed?
    The application form has all the queries related to the information needed by the company to give away the policy. It is advised that all needed information asked by the company should be provided and nothing should be hidden, even for the medical exam report as the company reserves the right to cancel the policy or prevent giving the benefit to the beneficiary if the truth is revealed. However, the insurance company is limited by a time period to cancel the policy and after this time period is over the company is bound to pay the benefits regardless of anything.
  • Is life insurance coverage required for spouse and children?
    One should definitely buy a life insurance for spouse as both equally contribute to the family budget even though the wife stays at home. Insurance for children depends on the parents affordability or if they think that he/she may not get insurance in the future because of sickness or any other reason.