Term Life Policy Basics
A term life policy is the first thing that a consumer really needs to understand when they are shopping for life insurance quotes on or offline. There are a variety of terms and inner workings with life insurance plans, but all of that simply is not important until you know exactly what a term life policy is, and most importantly, what it does for you.
When a Term Life Policy is actually issued
When you go through the application process you fill out a variety of paperwork in which you “apply” for the life insurance. However, a term life policy is not actually issued until the medical underwriting process is completed, and an offer of insurance is made. At that point, if you decide to accept the medical offer, the life insurance policy will issue you the actual term life policy to officially give you the option of putting the coverage in place, or in force.
What to expect in a term life policy
The physical term life policy is usually a paper document that is either mailed directly to you from the insurance company, or “delivered” to you by your life insurance agent. Within the policy itself, there are usually a few sections that you will need to note.
The term life policy declaration page is usually a few pages that are towards the front of the policy that lay out the details of the plan. Critical information that is contained on these pages usually includes
- The Face Amount or Death Benefit of your term life policy
- The Length of the Insurance Term
- How much and how often to make a payment
- The contact information for the life insurance company
After the declaration page, there is usually a copy of the application for life insurance contained in the term life policy. The insurance company includes this as a record of exactly how you filled out the application, and the details of the questions that were included when you applied for the policy. If there is ever any confusion as to whether you were truthful or not in filling out your term life policy application, this serves as proof of sorts for you and for the carrier.
The last component of a term life policy is usually the legal jargon that makes up the contract itself. Usually, this is the fine print that tells you exactly what the offer of insurance means, what it covers, and what it doesn’t cover. Don’t worry, the only time you usually have to worry about a life insurance policy not paying would be if you were not truthful in your answers, or if you committed suicide within 2 years of receiving the term life policy itself.
Try to keep a copy of your term life policy with your records
It is always a good idea to keep a copy of your term life policy with all of your important records as a point of reference. However, provided that you pay the premium, you do not have to have a copy to get the benefit, so don’t panic if you do not have a copy handy. It is useful to have in case you need to contact the life insurance company with questions or a claim. Nevertheless, if you lose this document, most insurance companies will be happy to issue you a new term life policy without a problem.