What Does Life Insurance Really Cover?


I’m sure I’ve mentioned it a time or two, but I really detest speaking of life insurance. It always makes me feel so morose; so sad. I begin to imagine the faces of my children should they ever wake up without me here. I see my husband all alone with all four of them as they ask for mommy, and I hear the heartbreak in his voice when he explains to them that mommy isn’t here. I hate it; I mean, really, really hate it. unfortunately, life insurance is one of those awful things we have no choice but to discuss. We have to talk about it because death is part of life, and being prepared always trumps not being prepared.

Essentially, life insurance is a policy you have on life. In the event of your death, money is paid out by your insurance company to the beneficiary on your policy. Your beneficiary is typically a spouse or children – sometimes grandchildren or charity or whatever or whomever you choose to provide your money in the event of your death. It really does sound simple enough, but there are about a million little things you need to know about life insurance.

I wish I could answer all your questions and take care of all the fine print for you; I cannot. There are so many different insurance companies, types of policies and riders that I cannot even begin to cover the questions you might have about your specific needs. What I can do, however, is try very hard to answer some of the questions people most frequently ask regarding life insurance.

Yes, Anyone Can Get Life Insurance

I once had someone ask me why I bothered with a life insurance policy before I was married or had kids. Simple; anyone can have life insurance. If someone had happened to me at that time, I wanted my husband (he was my fiancé then) to be able to afford to cover the costs of the funeral and cremation service. Parents can carry life insurance on their children, on their parents, on anyone. Anyone can have a life insurance policy, and it is always a good idea to have one in case of financial need upon death.

No, Life Insurance Does Not Cover All Deaths

This is a tricky subject. Death is not typically someone’s fault, which is why this is something that needs to be discussed in further detail with your particular provider. However, if you choose to commit suicide, rest assured that most providers will not cover your life insurance policy. It becomes void when you kill yourself. Additionally, many insurers will not pay out if you die right after you take out a life insurance policy, though circumstances might make a difference.

For instance, you might stand a better chance of your policy being paid out if you opened it recently and die in a plane crash or something unexpected. However, if circumstances are questionable, your policy likely will not be paid. If you have pre-existing health issues you did not disclose when you opened your policy, such as a terminal illness, then your policy provider likely will not pay out on your death. Some policy providers won’t even insure you if you take part in dangerous or extreme sports or even if you are part of the military.

Yes, You Can Add Riders

Many insurance policies offer the people who open them a chance to add on riders to make sure that certain events that might not be covered otherwise are covered. For instance, let’s say that you die in an accident. A double indemnity clause will allow your insurer to double your policy so that your living family members are paid more than you actually took out.

There are also riders that care for you if you become injured so badly in an accident or occurrence that you are no longer able to work, you are permanently disabled or you can no longer do what you did before. You’ll want to speak to your insurance provider about these specific types of policies, riders and premiums.

Every life insurance policy is different. Every family is different. Everyone is different. What your family needs might not be what another family needs in term of life insurance. We cannot tell you what you need, how to open a policy to your liking or even what company to choose. What we can tell you, however, is that taking out a life insurance policy on yourself is something you should do for the sake of your family. Speak to your insurance provider to discuss what you should do, what considerations to make and how to go about choosing the appropriate policy. These professionals can better answer your questions and help you with your needs.

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