Getting a Life Insurance policy is very important, and it’s one of the best ways to ensure the financial security of your family after your death. However, if you’re not wise enough, your survivors may not be paid what they deserve.
This post has explain mistakes that kill life insurance claims you should avoid. So that your beneficiaries get what they’re owed, no matter what type of life insurance policy you have.
4 Mistakes That Kill Life Insurance Claims Policy
1. Not Saying the Truth on your Life Insurance Application
It really hurt when you lie on your life insurance application. You may deny that you’re a smoker, or that you’ve been treated for a particular disease or medical condition, you could find your policy null and void. Life insurance companies consider these factors when setting rates to determine whether to insure you at all.
If your life insurer discover that you lied, it’s considered “material misrepresentation,” and your application for life insurance will probably be denied.
2. When You Fail to Pay and Letting your Policy Lapse
When you miss a payment, it dose not mean that your policy is dead in the water. Life insurance companies offers policyholders a 30-day grace period for payment, and some companies extend that to 60 days. As off that time your policy will still be in effect.
If you have a permanent life insurance policy, the insurer might use the cash value in the policy to cover the premiums and prevent a lapse in coverage. The important thing to remember is if your policy lapses and is not in force when you die, your beneficiaries are out of luck.
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3. Failing to tell loved ones about your life insurance policy.
If your beneficiaries is not aware about your life insurance policy, it doesn’t mean the insurer won’t pay them after your death, but it does make the process difficult. It’s advisable that your loved ones know about your policy and where to find it after you’re gone.
4. Not naming a secondary and final beneficiary
It’s important to name secondary and final beneficiaries. If your primary beneficiary dies before you, policy proceeds will go to the second beneficiary you have listed. If the secondary beneficiary has passed away when you die, then the death benefit goes to the final beneficiary.
So, ensure you avoid those mistakes that might destroy your Life Insurance Claim, in other for your beneficiary not to suffer.
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