When you buy a life insurance policy, you are providing money to support your loved ones after you pass away. By paying a premium each month, you are insuring that your family will have the money to pay for a funeral as well as have money for monthly expenses after you are no longer here to support them financially. It is income protection insurance which replaces the money you earned during your lifetime with money paid out by the policy.
If you are interested in applying for life insurance, you must first find a broker and then fill out an application. The application will require basic information such as your name and age as well as detailed information about your health history. Most insurance companies require you to undergo a general health physical by one of their own doctors to determine the state of your overall health.
After you have completed a physical and turned in your application for life insurance, it will be reviewed by a person known as an actuary whose job it is to determine if you are a good risk for the company to insure. Some factors that are used in determining risk are your age, occupation, whether you smoke or if you regularly engage in dangerous activities.
If the actuary determines you to be an acceptable risk to the life insurance company, you will be approved for a policy. The monthly premium will be based on how long the actuary predicted you would live under normal circumstances. People who are older can expect to pay higher rates, as well as those with chronic health conditions.
You should review your contract as soon as you receive it to make sure you understand the amount of coverage you have, how long the policy is in effect for and what your monthly premium will be. You will also need to name one or more beneficiaries who will receive payment from the policy upon your death. In order for the life insurance policy to be considered valid, you must sign it and make your first monthly payment.
We’d like to thank Miss Sue Lang VEC on this great article.
