Team Life Insurance Presentation

FIN/420

Introduction

The purpose of life insurance is to provide protection against the potential of financial loss in the event of loss of income. This paper begins with a comparison of the different forms of life insurance and the reasons to select one over the other. Next there is discussion regarding some of the provisions of life insurance what these provision mean to the policy holder. There is a discussion on the methods used to calculate how much life insurance a person needs along with some general recommendations about life insurance, as everyone may not need life insurance and may not know some of the additional benefits that insuring one’s life can have.

Amy- Use 250-300 words, Compare and Contrast the Various forms of Life Insurance

Provisions of Life insurance policies

Life insurance provisions explain what a life insurance policy consists of. It describes the duties and responsibilities that all parties have, how the policy will operate, and outlines provisions and clauses. Below are a few of the standard provisions that exist in life insurance policies.

Entire Contract Clause

The Entire Contract Clause describes the parts of the life insurance contract. The contract consists of the policy, riders, amendments, and the application. All parts of the contract must be in writing and any changes in the contract must be approved.

Incontestability Clause

The Incontestability Clause allows the insurer to contest a claim and void the contract with there is proof that material information has been misstated or fraudulent. Most incontestability clauses state that if the policy is in force for 2 or more years, the material within the contract cannot be contested.

Insuring Clause

The Insuring Clause outlines the parties to the contract and the perils or conditions in which it will pay. The insuring clause is the insurance company’s obligation to pay the beneficiaries of the policy once the insured as expired if it has happened while the policy was in force.

Suicide Clause

Most suicide clauses that state if an insured commits suicide within 2 years of the issue date, the insuring party is only obligated to refund the premiums that were paid into the policy. If the insured expires after 2 years and commits suicide, whether sane or insane, the beneficiaries will honor the death benefit.

Other Provisions

Life insurance policies can have many more provisions and riders such as owner’s rights, assignments, and explanations of free look periods, exclusions, and much more. Different life insurance providers will offer different variations, but the provisions listed above come standard in most life insurance policies.

Danika – Use 250-300 words: Evaluate and explain the methods used to calculate life insurance needs

Curtis – Use 250-300 words: Make any general recommendations.

Deciding to purchase life insurance is a big deal. If you do not have any dependents, then more than likely you will not need life insurance. Before a purchaser makes that big decision, they should consider their life and what they are responsible for. If your income is depended on to pay most of the bills or you have children that you want to send to college, it would be smart to purchase life insurance just in case an accident does occur. You may also want to purchase life insurance if you want to leave money behind for other family members, siblings, nieces, nephews, aunts, uncles, or parents. In the event your life ends before any other family members. While you are researching the different life insurances, you should keep in mind your life style to figure out which one fits best for your life. If you work in a dangerous field, or you are a smoker your policy may be more expensive. Not only that make sure that you read threw all the fees, some plans have hidden fees, that could potentially become expensive. Not only that but the clauses will also influence which policy you will pick. Some basic provisions that are standard to most policies include entire contract clause, incontestability clause, insuring clause, and suicide clause. The typical person may not understand the provisional jargon, or the rules around the fees. So, getting a second opinion and having someone investigate the contract with great detail would be to your benefit. Getting a life insurance lawyer involved in this process would be wise. That way the insurance company can not take advantage of you.

Coty – Use 75-100 words Write Conclusion

References

What are life insurance policy provisions. (2019, March 17). Retrieved from US Tax Center- at IRS.com: http://www.irs.com/articles/what-are-life-insurance-policy-provisions