What are the basic rules of term life insurance?

by hirby

I am looking at 30 year term life for my husband and myself. Why do they need to come out to take blood to check our cholesterol and liver function tests? We are only buying 0,000 each worth of insurance . Is it the dollar amount or the fact that we are 40 right now? How does life insurance work? What if we both die right away does our son get the entire amount or is there a "waiting period" where you have to pay in for a certain amount of time before they get the money? Also, are there any exclusions such as suicide and is this normal for a policy to have these certain exclusions? The company is AIG and I think they are listed as being a solid company. Thank you in advance for your information it is appreciated. 1) Base on the coverage amount that you and your wife is taking, a medical exam is required to figure out if either of you qualify for life insurance. It also determines what rate you should be paying.

2) Premiums are based on the age closest to the policy issue date. So, if you are 40 now and you turn 41 next month and the policy is issued next month, premiums are based on the age of 41.

3) After both of you have sign the life insurance application and paid the first month premium, you are immediately covered. So if you died an hour later after the life insurance application was signed, your beneficiary will receive the $500,000

4) If you commit suicide during the first year or two, the insurance company will refund all premiums paid to the beneficiary. After the first 2 years, the insurance company must pay death claims no matter how you died.

When you get your life insurance policy, you should carefully read it and call customer service (not the agent) if you have any questions about it. I think most states have a law where you have a free look period, which means you haver certain amount of days to review the policy (usually 10 days). If you don’t like what you see, you have until that last day to return the policy and get the refund.

Read more...