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Life Insurance Knowing Your Rights

By Graham McKenzie

Republish: EasyPublish™
Published: 08Aug2009
Word count: 502
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When it comes to life insurance, it's very important that you understand all of your rights and how they will affect you and your family. Before you purchase a life insurance program make sure it is the right one that fits all of your needs. It is much easier to find an insurance program than changing one to work for you.

You life insurance rights depend mainly on the type of insurance you are looking at getting. Perhaps the most well known is whole life insurance, which provides a set amount of money for the beneficiaries when you die for a monthly rate. Term life insurance is similar, but it has lower premiums because this insurance is only provided for a set amount of years instead of your whole life.

Whichever type of insurance you choose, you are always entitled to a free-look period. This is a time frame between 10 and 30 days that allows you to thoroughly look over your agreement. In some states it is a law that a notice of this right must be attached with your policy. During this time you can read all of the fine print and ask any questions you may have thought of since you signed the papers. If you decide to cancel the agreement just return the papers to the insurer with a written statement that you want to cancel it. All payments will be returned and the agreement will become void.

This is very important for people who have trouble understanding everything involved with their life insurance. This time allows you to contact your lawyer to have them look over it or to read through the whole thing yourself. The exact length of days you have for a free-look period depends on which state you live in. All contracts are supposed to be easy to read and understand, but sometimes life insurance contracts can include clauses and fine print that wasn't fully explained to you when you signed your policy. Use the free-look period to make sure that you fully approve of the contract.

Understand that if you get term life insurance that it may be harder for you to get insurance down the road. Older individuals are subject to higher rates because they are not expected to live as long and make as many payments. There are several different ways you can arrange your program so that it includes the payments and payout that you want, but it usually costs a fair amount of money. If, for example, you are an older individual and you want to lower your monthly rates on a new life insurance plan, you can offer to pay out a lump sum followed by your smaller monthly payments. This lowers the risk for the insurance company, although it will probably save you a little money in the end. Even after you death, your friends and family may be able to negotiate with the insurance company to get a single large payout instead of several smaller ones.

Graham McKenzie is the content syndication coordinator a leading South African Life Insurance and Life Cover portal.

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