Reviewing Your Policy
As we read the news coverage surrounding the devastating Amtrak Train 188 crash on May 12, we can’t help but think about the eight families who lost loved ones in the tragic accident. We mourn their loss; as members of a greater community we grieve for the future they would have had with their loved ones. We hope that these families are provided for financially.
Accidents like this one can serve as a wake-up call, and prompt us to examine the legacy that we will leave for our own families. Will your spouse and children be provided for after your death? Many of us have purchased life insurance policies to make sure that those we leave behind will have secure financial futures.
Details of Your Policy
Reading a life insurance policy can seem daunting at first, but it is definitely something that you can understand. You may want to begin by familiarizing yourself with the different parts of your policy:
- The Cover Page: This identifies the insurance company and type of plan, offers your right to return the policy within 21 days if you aren’t satisfied, and carries the insurance company officer’s signature.
- The Schedule of Benefits: This describes the heart of your policy. It includes the amount of benefits, your premium, and other charges you must pay. It also lists the insured party, the issue date, the policy number, and the “class” of policy (like preferred or standard).
- Tables: This section shows you future projections for your premiums or guaranteed cash values, depending on the kind of policy you own.
- Definition of Terms: This defines words and phrases used in the policy contract.
- Explanation of Rights: This tells you what your rights are as the owner of the policy, such as the right to change the beneficiary.
- Settlement Section: This describes how to make a claim and includes information on the choices available to your beneficiary regarding the death benefit.
- Riders/Endorsements: These are additions or changes to the standard policy added by you and approved by the company. If your policy includes riders or endorsements, they will be attached to the policy (along with the application).
- Policy Provisions: These are important parts of your policy that are often required by law and are fairly standardized.
Now that you understand how to read your policy, here is a list of things to watch out for. These are elements of “fine print” that can radically impact the benefits that your family will be provided with after your passing.
- Re-read your insurance policy application and make sure that all of the information is correct. Making false statements on your application can void the entire contract. Pay particular attention to your age—a misstatement of age can lower the value of your contract considerably.
- Make sure that all of the benefits that you discussed with your insurance agent are included in the actual policy contract. Nothing that you discussed with an agent prior to purchasing the policy is promised to you unless it is listed in the final policy contract.
- Read the Schedule of Benefits and make sure that you understand what your premium is, when premium payments are due, and what kind of “grace period” you have within which to make your payments past the due date. (The typical grace period is thirty-one days.)
- Most insurance policies contain a reinstatement clause. This clause allows you to reactivate a policy when you have failed to make a premium payment on time or within the specified grace period. Not all policies contain this clause; if this clause is included in your policy, it will be subject to very specific requirements on your part. It is important to be aware of what those requirements are in case you need to avail yourself of this option.
- Finally, it is a good idea to review the settlement section of your policy with your beneficiary so that he or she understands what to do should they need to file a claim.
Life insurance policies exist so that your family is financially protected upon your death.
Contact a Life Insurance Claim Lawyer
It is important to understand the details of your policy so that you can be certain that your loved ones will not bear any additional burdens upon your passing. We hope that these guidelines help you understand your rights and responsibilities as a policyholder. As always, should you face any issues when taking advantage any of your rights provided for in such a policy, please contact our New Hampshire life insurance claim attorney Jonathan M. Feigenbaum, Esquire so that we can assist you. Call 617-357-9700.