Life insurance beneficiaries are people you name in your policy which will receive a death benefit if you should die. If you choose not to name a beneficiary, then a death benefit will be paid out to your estate. This article takes a fast look at the beneficiaries of life insurance policies.
Life insurance is used for the purpose of providing a payment of money after the death of the person who was insured by the policy. The insured person is mentioned in the policy as being the person covered by it. The money payment from the policy in the event of the passing away of the insured is called the death benefit. It is paid out to beneficiaries mentioned in the policy contract.
What is a beneficiary?
This person is nominated in a life assurance policy contract to receive the death benefit. You are able to nominate a single person or more, a trustee, a charity or just your estate.
There are basically two types of beneficiaries. They are a primary and a contingent nomination. The primary person receives a death benefit if she can be contacted after your death. In case the primary person cannot be found, then the contingent person will receive the death benefit. If both are missing the benefit is paid to your estate.
The beneficiaries of your life insurance policy should be clearly identified to prevent possible confusion. You can include a social security number for each relevant person you name. Provide full names of the people you choose.
There are more types of beneficiaries as well. Let us take a look at them.
Final beneficiary -- This person or entity will receive a death benefit if they outlive the other ones. This level is usually reserved for aunts and uncles or a charity of your choice.
Multiple beneficiaries -- When choosing multiple individuals to receive the death benefit, it is important to state clearly how much each individual should get.
Many married people choose to name their spouse as a primary beneficiary. Be mindful when choosing to name an executor, creditor, or a minor to receive a life insurance policy death benefit.
It is important to regularly update your policy information with regards to the beneficiaries. This is especially important after events such as a divorce or child birth.
Be mindful of these tips to help you with life insurance beneficiaries.
* Designate both primary and contingency persons.
* Provide their full name and state their relationship to you.
* Clearly define how the death benefit is to be divided between the beneficiaries.
You should be certain to buy enough life insurance for your particular needs. You should also match the duration of the policy to your individual needs. Buy life insurance when you are healthy since this will ensure a lower premium.
The beneficiary receives a face value of the policy if the policyholder dies within the specified duration of a policy. If the insured person survives this period, then the beneficiaries may receive no benefit. This is the old motive for murder you regularly see on murder mysteries on television. In the case of whole life insurance, this is less of a problem since they stay in force for up to 100 years of age.
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Sunday, December 7, 2008
Policy Holders Urged to Refrain From Lying on Life Insurance Forms
Insurance companies have warned customers about the dangers of lying on their insurance application forms. It has come to light that millions of people are in danger of having their life insurance policies cancelled due to lying about the status of their health.
Insurance companies tend to give cheaper premiums to people who can prove they are healthier and live a healthy lifestyle.
For example some companies cut down the premium rates of policy holders who buy healthy foods whilst others lower rates for policy holders with gym membership.
In recent times life insurance companies have offered new incentives like cutting the premium rates of non smokers as well as customers who do not use drugs or drink less.
For customers to be classified as a non smoker they will have stopped smoking for over 12months, this saves them £2,016 a year.
This has led to customers in poor health to lie about their health status in order to get cheaper rates. According to a new research 1 in 20 people lie on their insurance application forms. A Friend’s Provident study showed that 90% of people claim to always tell the truth on insurance applications however 5% admitted to lying on application forms. Whilst a fifth of people do not read the full terms and conditions on a policy when buying insurance.
A further study by Norwich Union found that 1 in 14 customers lied about their health and life style when applying for Life Insurance. This has prompted insurance companies to demand customers to prove their health status or risk having their policies cancelled, pay higher premiums or their claims refused. Half of some 5000 customers they wrote to have replied back and admitted to lying which could render their policies invalid.
Lying on your life insurance policy application could end in personal and financial disaster according to Ian Durrell of Only insurance, "Smokers who declare they have given up but continue to smoke no matter how infrequently will be paying for nothing should they die from a smoking related condition; The policy simply won’t pay out and their beneficiaries will be the losers."
"Smokers will pay twice the price for critical illness cover than a non-smoker – it’s a no win situation for the smoker, their nicotine addiction is tightening both their heart and purse strings," concluded Mr. Durrell
Also things like having your life insurance policy pay off your mortgage and other debts when the breadwinner of the family dies could be snatched away if you lie on your application forms.
Many insurance companies may be writing to their customers to ask for proof of their health status and those found to be lying could be made to pay higher premiums or have their policies cancelled all together. Currently insurers reject about 25% of claims because of misinformation.
Getting life insurance is there to protect and give peace of mind, so when taking one it’s a good idea to do some research and seek advice first. And to avoid being disappointed when it comes to making a claim, read the terms and conditions carefully and clearly and answer the questions truthfully. Read More..
Insurance companies tend to give cheaper premiums to people who can prove they are healthier and live a healthy lifestyle.
For example some companies cut down the premium rates of policy holders who buy healthy foods whilst others lower rates for policy holders with gym membership.
In recent times life insurance companies have offered new incentives like cutting the premium rates of non smokers as well as customers who do not use drugs or drink less.
For customers to be classified as a non smoker they will have stopped smoking for over 12months, this saves them £2,016 a year.
This has led to customers in poor health to lie about their health status in order to get cheaper rates. According to a new research 1 in 20 people lie on their insurance application forms. A Friend’s Provident study showed that 90% of people claim to always tell the truth on insurance applications however 5% admitted to lying on application forms. Whilst a fifth of people do not read the full terms and conditions on a policy when buying insurance.
A further study by Norwich Union found that 1 in 14 customers lied about their health and life style when applying for Life Insurance. This has prompted insurance companies to demand customers to prove their health status or risk having their policies cancelled, pay higher premiums or their claims refused. Half of some 5000 customers they wrote to have replied back and admitted to lying which could render their policies invalid.
Lying on your life insurance policy application could end in personal and financial disaster according to Ian Durrell of Only insurance, "Smokers who declare they have given up but continue to smoke no matter how infrequently will be paying for nothing should they die from a smoking related condition; The policy simply won’t pay out and their beneficiaries will be the losers."
"Smokers will pay twice the price for critical illness cover than a non-smoker – it’s a no win situation for the smoker, their nicotine addiction is tightening both their heart and purse strings," concluded Mr. Durrell
Also things like having your life insurance policy pay off your mortgage and other debts when the breadwinner of the family dies could be snatched away if you lie on your application forms.
Many insurance companies may be writing to their customers to ask for proof of their health status and those found to be lying could be made to pay higher premiums or have their policies cancelled all together. Currently insurers reject about 25% of claims because of misinformation.
Getting life insurance is there to protect and give peace of mind, so when taking one it’s a good idea to do some research and seek advice first. And to avoid being disappointed when it comes to making a claim, read the terms and conditions carefully and clearly and answer the questions truthfully. Read More..
Healthy Lifestyle Equals Cheaper Premium
According to recent research conducted by Laing & Buisson, the number of people who are opting to take out private medical insurance has started to rise again, following a decline in recent years as a result of costly health insurance premiums.
The reason for this sudden change comes as insurance companies, in an attempt to maintain their customer base, are looking for ways to keep the costs of premiums down. An incentive that has been thought up is to link private medical insurance premiums to the fitness of a policyholder. Essentially, the more healthy ones’ lifestyle the more likely it is that you will incur less claims in the long term.
Insurance providers such as PruHealth, reward their policyholders for staying fit with their Vitality Plan, which is available at highstreet chemist Boots. If they attend the gym on a regular basis, do not smoke and undergo frequent medical check-ups with their local GP, they can be entitled to discounts of around 75% on their premiums, as well as guaranteed no-claims bonuses of at least 25%. A host of insurers, including Standard Life Healthcare, offer no-claims discounts, which can also be transferred from an insurer should the customer require it. For instance, if the customer makes no claims throughout a period of two years with one insurer and then decides to change to another insurer, the discount can, in some cases, be immediately effected with the new insurance policy.
Typically, insurance providers will apply an excess on most PMI policies so as to reduce the premiums, which will cover the policyholder for the first part of their treatment after which they will be responsible for paying the rest. However, some insurers are introducing the option of taking out a considerably larger excess, which will be at a substantially discounted rate. The insurer, Permanent Health, for example, offers policyholders an excess of up to £2,500 in return for a 50% discount on premiums, meaning that while the policyholder may not be covered for the treatment of minor conditions, they will be able to obtain private healthcare when undergoing more extensive and costly procedures. According to a spokeswoman for Permanent Health, many people, particularly the elderly who typically have more cash saved than younger policyholders, were prepared to spend money on a higher excess, in return for lower monthly premiums.
There are ways for people to generally cut back on their premiums, sometimes by switching to a smaller insurance company whose rates will not undergo the same fluctuations as larger insurers due to the simple fact that they have to deal with far less claims. Furthermore, if you purchase cover via a specialist broker, you are more likely to be privy to exclusive deals in addition to being represented by an insurer who is an expert in his field and therefore if you have a claim that is being contested, the specialist broker will help you to fight it. Be wary of budget policies unless you are informed of every detail in the small print, for example exclusions to policy and always remember to shop around when looking for a new insurance provider. Read More..
The reason for this sudden change comes as insurance companies, in an attempt to maintain their customer base, are looking for ways to keep the costs of premiums down. An incentive that has been thought up is to link private medical insurance premiums to the fitness of a policyholder. Essentially, the more healthy ones’ lifestyle the more likely it is that you will incur less claims in the long term.
Insurance providers such as PruHealth, reward their policyholders for staying fit with their Vitality Plan, which is available at highstreet chemist Boots. If they attend the gym on a regular basis, do not smoke and undergo frequent medical check-ups with their local GP, they can be entitled to discounts of around 75% on their premiums, as well as guaranteed no-claims bonuses of at least 25%. A host of insurers, including Standard Life Healthcare, offer no-claims discounts, which can also be transferred from an insurer should the customer require it. For instance, if the customer makes no claims throughout a period of two years with one insurer and then decides to change to another insurer, the discount can, in some cases, be immediately effected with the new insurance policy.
Typically, insurance providers will apply an excess on most PMI policies so as to reduce the premiums, which will cover the policyholder for the first part of their treatment after which they will be responsible for paying the rest. However, some insurers are introducing the option of taking out a considerably larger excess, which will be at a substantially discounted rate. The insurer, Permanent Health, for example, offers policyholders an excess of up to £2,500 in return for a 50% discount on premiums, meaning that while the policyholder may not be covered for the treatment of minor conditions, they will be able to obtain private healthcare when undergoing more extensive and costly procedures. According to a spokeswoman for Permanent Health, many people, particularly the elderly who typically have more cash saved than younger policyholders, were prepared to spend money on a higher excess, in return for lower monthly premiums.
There are ways for people to generally cut back on their premiums, sometimes by switching to a smaller insurance company whose rates will not undergo the same fluctuations as larger insurers due to the simple fact that they have to deal with far less claims. Furthermore, if you purchase cover via a specialist broker, you are more likely to be privy to exclusive deals in addition to being represented by an insurer who is an expert in his field and therefore if you have a claim that is being contested, the specialist broker will help you to fight it. Be wary of budget policies unless you are informed of every detail in the small print, for example exclusions to policy and always remember to shop around when looking for a new insurance provider. Read More..
How Good is Your Health Insurance Policy Really?
How much do you know about your health insurance policy? If your company provides your health insurance then you probably know just about as much as most people. You know the doctors to use and how much you have to pay before the insurance begins. For those that purchase their own health insurance policy, then you have very different situation.
The cost is the first difference that most people notice if they switch from a group plan. When your employer offers health insurance, the cost is usually a lot lower if the group is large. One for the reasons is that they spread the risk the risk among a large group of people. The second includes the fact the cost of billing is lower because the company does the collection of premiums. The biggest reason for the price difference is that the employer pays part of the premium or all of it in very rare instances.
Frequently the coverage is broader in a group plan. The individual health plan seldom contains dental, prescription and eye care. The deductibles are often higher in an individual health insurance plan and coverage more limited. Often well baby care, wellness care, including physicals and smoking cessation and maternity are not part of the policy. Many employers discovered long ago how to keep costs down and increase coverage and you can do the same thing when you buy your health insurance policy.
Health insurance policies vary widely so you have to make some decisions about the type of coverage that you want. Do you want one that just covers major medical, the services of a hospital and outpatient surgery, or do you wand coverage that picks up the expense of doctors and routine physicals covered? When you include additional options and get a more comprehensive health insurance policy, the price goes up. Insurance company calculates the premium by presumed expense. They expect to pay more, because more people use the doctor and wellness care, so they increase the price accordingly.
Another way that companies keep the cost of the health insurance policy low is to use Health Maintenance Organizations, HMO’s. The doctors and hospitals in the group agree to a discounted charge, so the insurance company reduces the amount they charge the company. These types of plans are also available to the individual and create a cost savings without cutting corners. Often there is a co-pay for doctor’s visits and hospitalization and a few extra perks are in the package.
A final way to reduce the cost of a health insurance policy is to increase the deductible. The higher the deductible, the lower the cost. Many companies use a partial self-insure to reduce the cost. The insurance plan covers everything but has a huge deductible, about $5000 per individual. The company then starts a side fund that covers those smaller claims so the employee only pays a small deductible. This type of plan is also available for the individual. It is a combination plan where some of the monthly payment goes into a savings account used for upfront expenses. This account belongs to the individual and receives tax-free growth as long as you use it for medical expenses. The payment for up-front bills comes from the savings. Once you reach the chosen limit, a much lower cost health insurance policy takes over. These plans are great for healthy individuals.
When you compare health coverage, look for a plan that suits your needs and budget. Check the reduction of premium as you increase the deductible and, even if you don’t have a MSA, set the savings aside to cover the additional out of pocket. Study your health insurance policy as the corporations do and you save on one of your biggest monthly expenses. Read More..
The cost is the first difference that most people notice if they switch from a group plan. When your employer offers health insurance, the cost is usually a lot lower if the group is large. One for the reasons is that they spread the risk the risk among a large group of people. The second includes the fact the cost of billing is lower because the company does the collection of premiums. The biggest reason for the price difference is that the employer pays part of the premium or all of it in very rare instances.
Frequently the coverage is broader in a group plan. The individual health plan seldom contains dental, prescription and eye care. The deductibles are often higher in an individual health insurance plan and coverage more limited. Often well baby care, wellness care, including physicals and smoking cessation and maternity are not part of the policy. Many employers discovered long ago how to keep costs down and increase coverage and you can do the same thing when you buy your health insurance policy.
Health insurance policies vary widely so you have to make some decisions about the type of coverage that you want. Do you want one that just covers major medical, the services of a hospital and outpatient surgery, or do you wand coverage that picks up the expense of doctors and routine physicals covered? When you include additional options and get a more comprehensive health insurance policy, the price goes up. Insurance company calculates the premium by presumed expense. They expect to pay more, because more people use the doctor and wellness care, so they increase the price accordingly.
Another way that companies keep the cost of the health insurance policy low is to use Health Maintenance Organizations, HMO’s. The doctors and hospitals in the group agree to a discounted charge, so the insurance company reduces the amount they charge the company. These types of plans are also available to the individual and create a cost savings without cutting corners. Often there is a co-pay for doctor’s visits and hospitalization and a few extra perks are in the package.
A final way to reduce the cost of a health insurance policy is to increase the deductible. The higher the deductible, the lower the cost. Many companies use a partial self-insure to reduce the cost. The insurance plan covers everything but has a huge deductible, about $5000 per individual. The company then starts a side fund that covers those smaller claims so the employee only pays a small deductible. This type of plan is also available for the individual. It is a combination plan where some of the monthly payment goes into a savings account used for upfront expenses. This account belongs to the individual and receives tax-free growth as long as you use it for medical expenses. The payment for up-front bills comes from the savings. Once you reach the chosen limit, a much lower cost health insurance policy takes over. These plans are great for healthy individuals.
When you compare health coverage, look for a plan that suits your needs and budget. Check the reduction of premium as you increase the deductible and, even if you don’t have a MSA, set the savings aside to cover the additional out of pocket. Study your health insurance policy as the corporations do and you save on one of your biggest monthly expenses. Read More..
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