The most important reason why a person buys life insurance is to provide for their near and dear ones when they die. Everybody wants to provide for their family if something should happen to them. Life insurance is the cheapest, easiest and best way to do just that. Death is something most people do not talk about but when you are buying life insurance, you must tackle this delicate topic.
The cause of your death can affect the payment of death benefits to your beneficiaries. Most term life insurance policies have special provisions in place for deaths not caused by medical complications or natural causes. You need to be aware of what situations could keep your family from collecting benefits. You may be able to provide more protection for your family in such situations by adding riders to your life insurance policy.
Here are some of provision that can affect the payment of death benefits to your beneficiaries:
• Suicide: Loosing a near one to suicide is sad and terrible. Most insurance policies have suicide clauses that state the plan must have been active for two years prior to the date of death for the beneficiaries to receive the benefits. The policy is voided and the money is usually forfeited if two years has not passed.
• Foul Play: Almost all life insurance policies have a clause which reserves the right to withhold claims because of foul play. If the cause of death is suspect, the insurance company will conduct an investigation before paying the benefits. The results of the investigation will determine if the beneficiaries will receive the benefits or not. This clause has been prompted by cases where the insured have been murdered by the beneficiaries to collect the death benefits. The insurance company will use the evidence of police and governmental investigations and their own researchers to make a decision on claims where they suspect foul play as the cause of death.
• Accidental Death: If your policy has accidental death benefits, the claims will be subject to extra scrutiny if the cause of death is an accident. Accidental death rider is referred to as the double indemnity clause. If you add a double indemnity rider, the life insurance company will pay to your beneficiary twice the face amount of your policy if die in an accident. You can also add a triple indemnity rider for certain life insurance policies and the insurance company will pay thrice the amount if you die in an accident. . If you had a triple indemnity rider, the amount would be thrice the face amount. The insurance company is responsible for determining whether the cause of death was in fact an accident.
