Underwriting |
Not usually underwritten
until a claim is made. So even though you were paying premiums,
your claim may be denied because of a medical condition if it has not
disclosed on the medical information form – such as the fact that
you once had high blood pressure. The forms and questions are
often confusing and not clear.. |
Your risk is assessed
when you apply, including an examination of your medical history so
you know right away whether or not you will be covered in the event
of your death, along with any exceptions. |
Premiums
and flexibility |
One size fits
all. Take mortgage insurance for example: It’s convenient
because premiums are tacked onto your regular mortgage payments, but
your lender owns the policy and if you find a better mortgage rate at
another lending institution, your mortgage insurance cannot be moved
to the new institution, and you may have to requalify medically for
the new protection.
It covers the exact amount
of your mortgage and, even though your premiums remain the same, your
coverage decreases as the mortgage is paid down. So you end up paying
the same premium for less coverage, leaving you with no coverage at
all when the mortgage is paid off.
If anything happens to you,
the death benefit is payable to the lender, not your family. And renewal
rates aren’t guaranteed and the insurance can be cancelled by the
lender.
Credit card coverage has similar
restrictions. |
Insures you, not
the balance on your mortgage or your credit card. You own
the policy so you have the freedom to switch your mortgage to another
lending institution or to move to another credit card company without
jeopardizing your coverage, and your beneficiaries can choose how to
use the funds – pay off the mortgage or your credit card balance,
provide a monthly income, or take care of a more immediate need.
Plus, with individual life
insurance, your coverage isn’t reduced as your mortgage or credit
card balance declines.
Premiums are based on specific
factors – such as your age, gender and medical history – and are
usually guaranteed. Once in force, the policy cannot be cancelled
by the insurance company unless you do not pay your premiums.
You can also choose the type
of policy (term or permanent) that best suits your needs and customize
it with the options and features you choose, which may include having
your premiums waived if you become disabled.
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