What is the Life Insurance Application?
Life insurance is basically a contract between a policyholder and an insurance company or insurer, in which the insurer pledges to cover a designated beneficiary an amount of money upon the demise of an insured individual. Depending on the agreement, death benefits can be paid to beneficiaries in different ways. In some cases, the benefit can be in the form of regular payments made on a monthly basis, whereas in others it can be in the form of a life insurance dividend. In some states, life insurance companies can also choose to make installments rather than making a lump sum payment on death benefits.
There are two main types of life insurance. The term insurance, or endowment life insurance, promises a fixed premium payment for a fixed amount of time. In this kind of policy, the insured pays an initial premium, which is used by the insurer to buy endowment. In the event that the insured dies during the term, the insurer makes regular payments to the named beneficiary.
The second major type of insurance is the universal life insurance, also known as whole life insurance. In this kind of insurance, the premiums stay level for the lifetime of the policy, but the face amount increases over time. This face amount increases because of inflation. Some of the more popular insurance companies offering this kind of coverage include Allstate, Farmers, and GI Federal.
Both of these forms of life insurance policies use a number of different terms to describe the end result. For example, term life insurance policies may state that the policy will pay out a set amount for a specified period of time, such as a year or a series of years. They may also specify that the insured pays a certain amount for a specified number of years after the policy was purchased, such as a decade or a century. However, some policies will be a combination of these two different terms.
In addition to the premiums that the insured pays out each term, they may also be subjected to an accelerated death benefit rider. With this rider, the insurance company will pay the beneficiary a lump sum amount if the insured dies within a specific time frame after the policy was purchased. The death benefit rider is usually found on a ten or twenty year life insurance policy, although it may apply to all policies instead.
When the time comes to purchase a life insurance policy, there are a number of steps that the policyholder should take. To begin with, the policyholder must fill out the application, including medical and other information forms. After submitting the application, the company will assess the rate and then offer an offer. At this point, the policyholder must choose the policy and then purchase it at the current premium rate.