What should be included in your life insurance policy?

You life insurance policy outlines your and your insurer’s contractual responsibilities for your life insurance cover to be active. If you fail to live up to your obligations, then the insurance company has the right to reject any claims made on the policy. More than this, though, your policy document details the extent of your cover. You’ll want to check it to make sure that you’re adequately covered. In order to do this, you’ll need to know what your life insurance policy includes.

Insured’s details

It goes without saying that the life insurance policy should include the insured’s details. Although each insurance company’s policies differ, the document should include the insured’s ID and policy number, which should be accurate so as to establish without doubt the veritable policyholder.

All the insured’s details of the life insurance policy should be accurate as these determine the insurable risk. If the demographics, such as age, are incorrect, the insured may be held liable for nondisclosure.

Product details

The life insurance policy should also outline the value of the policy and its extent. That is, what the product is (namely life insurance, dread disease or disability) and how much the insurer will pay out in the event that an insurable peril takes place. The policy should also include a start date. This determines from when the cover begins, which is important as certain cover only begins a few months or years after the policy becomes active. (For example, a life insurance policy may only include dread disease after a year or more to prevent insurance fraud.) This section of the policy will also indicate the value of the insurance premium. This is

Insurance obligations

The life insurance policy will also document the obligations of the insured, outside of paying premiums, such as informing the insurer in a change in his or her risk profile (if the insured begins smoking, for example). Any material change in risk must be related back to the insurer who will then adjust the premiums accordingly. Failure to do so can lead to any claims on the life insurance policy being rejected on the grounds of non-disclosure.

The life insurance policy will also stipulate certain obligations in certain hypothetical situations, such as seeking the assistance of and advice from a trained medical practitioner in the event that a dread disease is diagnosed. Failure to accept to recommended treatment (within reason) could see claims get rejected.