Life Policies

This is generally not a fun topic of conversation, for these policies are intended to pay the beneficiary the specified benefits upon the death of the policy holder. And, no one wants to think about the death of a loved one.

There are generally two types of life policies – whole life and term.

Whole life policies build up a cash reserve or surrender value as the policy matures. It may be borrowed against and/or used to pay premiums. To the extent that the policy has become satisfied by the regular payment of premiums, any additional premium payments may actually increase the death benefit. If the policy holder decides to cancel or “surrender” the policy before it his/her death, the accumulated cash value may be paid to the policy holder. These policies require complete underwriting, and any mistake or innocent misrepresentation may have dire consequences, such as a denial of payment, when a claim is made for payment of the benefits.

Term insurance is, as the name states, for a term specific. These policies may be purchased individually or as part of a group package, and may require underwriting, or may not, which is generally dependent upon whether the policy is a part of a group plan. The terms may be for 5 years, 10, 15, 20 and, sometimes, longer. At the end of each term, the policy holder must be medically re-insurable and, contrary to a whole life policy, the renewal rate may increase as the policy holder ages.

Whole life insurance has a variety of benefits, such as continuous coverage and no renewals, a cash value which may be used to pay premiums for a while, with no requirement that the policy holder be medically insurable as he or she ages. The policies may be purchased to develop a value which will assist in paying for college, or to guarantee insurability down the road.

And, there are different types of whole life policies or, more accurately, different methods of funding the policy to keep it current. One of the more commonly known types of such policies is the Universal Whole Life Policy. This policy is investment market driven, in that its growth, and the amount of the required premium payments, is dependent upon how well the investment market does, as the payments are invested in stocks and as the market goes up, or down, so goes the growth of the policy.

The payment of claims for death benefits may not be a simple as filling out forms and submitting a death certificate. Insurers may raise underwriting issues and policy defenses to deny payment. Competent counsel can assist you in making your claim and addressing issues that may be raised by the insurers.

Call or email Barry M. Feldman, today.