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Things you need to know about life insurance in your state

Saturday, October 1st, 2011

Life insurance is absolutely necessary nowadays as life itself is unpredictable. Every individual should ensure that they have adequate coverage, especially if they have family members who are dependent on them.

Term life insurance is widely popular especially among the younger population that has families and children or even mortgages and loans to take care of. Whole life insurance is much more expensive than term life insurance. Hence, term insurance is easily affordable for most people. Whole life insurance coverage will extend for the entire life time of the policy holder and is hence more expensive when compared to term life insurance that is only for a specified period of time. The term normally varies from 10 – 30 years in variables. The premium that would be charged will be based on the probability of the policyholder dying within the term mentioned in the policy.

The term life insurance policy only makes a single pay out and that is done if the policyholder expires within the term of the policy. The money is generally paid to the beneficiaries who are mentioned in the policy. Once the policy expires, the policyholder may either choose to renew the policy or allow it to lapse. It is important to note that the beneficiaries will not receive the death benefits if the policyholder expires after the end of term of the policy without renewing the policy. However, they will receive death benefits if the policy has been renewed by the policyholder before their death.

While purchasing term life insurance policies, individuals must understand that the policy itself will vary from one state to another. The federal government formulates most of the rules and regulations in the case of life insurance, but there may be some differences that have to be understood prior to purchasing the policy.

Earlier, people had to call up insurance agents or insurance companies in order to get details regarding insurance policies. However, with all the latest advancements in technology, getting online quotes has become very easy and you can get multiple quotes online from different carriers as well. Obtaining quotes and comparing them is very critical prior to purchasing a policy. Before you purchase the policy, you should be well aware of the rules of the state and you should also ensure that the insurance company has a valid license to operate within your state.

Rules vary from one state to another when it comes to term insurance policies. A company in one state may have a certain period of time to settle a claim before they start paying interest. Most of the states have a minimum period of one month to process the claim, after the paperwork is complete. However, in some states the insurer will have two months’ time before the insurance carrier starts paying the penalty. This is done to ensure that the claims are settled quickly without putting beneficiaries through unnecessary hardships due to the delays in releasing the amount that rightfully belongs to them.

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