A life insurance policy provides financial security and peace of mind, making it an invaluable part of your end-of-life planning.
The life insurance policy is a legally binding document that includes all the information about your coverage. It may be lengthy and include lots of legal jargon, but don’t let that intimidate you. Learn about the different parts of an insurance contract and what you can expect to see included.
Declarations Page
The declarations page summarizes your life insurance policy details. On this page, you’ll find information about what is and isn’t part of your insurance coverage, your coverage limits and other key information about your benefits. This section’s contents may vary depending on the insurance company, but this is what’s usually included:
- Personal information: As the policyholder, your name, birthday, social security number and other identifying information will be listed.
- Benefit amount: This may also be called the “face amount.” When you die, this is the total sum of money that will be distributed among your beneficiaries.
- Policy type: Term or whole life insurance are the two main types of insurance policies you’ll choose between.
- Premium amount: The amount you pay for insurance coverage.
- Policy issue date: This date reflects the date your contract was created. This may not be the same as the date your coverage starts.
- Policy number: The life insurance company assigns your policy a unique number for easier reference.
- Term length: If you have term life insurance, your policy will last a certain number of years before expiring, which is your term length. Whole life insurance never expires.
- Premium class: This is the category insurance underwriters place you in after reviewing your application. Your medical history, occupation and hobbies, weight, tobacco and drug use, criminal history and family history will all factor into your classification.
- Beneficiary: The names of the individuals you’ve designated to receive your death benefit.
Insuring Agreement
Where the declarations page is more of a synopsis of your policy, the insuring agreement is the main component that describes the scope of your insurance coverage. In this section, the insurer promises to pay the death benefit on behalf of the insured and outlines what your premium payments cover.
Exclusions
In this section, you’ll learn what’s not included in your policy, or what your policy won’t cover. For example, if you’ve misrepresented any of your information, your insurance company may refuse to pay your death benefit. Illegal activity, suicide and substance abuse are a few other common exclusions on a life insurance policy.
Conditions
The conditions are the policy provisions that must be met in order for the insurance company to pay out. Read this section carefully to make sure you meet all the conditions listed, or your claim may be denied.
Riders
A life insurance rider, sometimes called an endorsement, is added onto an existing life insurance policy to adjust or expand the benefits of your insurance coverage for an additional cost. Riders may be necessary if you have risk factors like a chronic illness or a dangerous job that require extra protection.
Definitions
Insurance involves a lot of legalese. Most policies will provide a definitions section to help you understand any terms you may not be familiar with. Here are a few of the terms you might find in a life insurance policy.
- Underwriting: The process of evaluating an insurance application, weighing the risks and determining how much coverage to provide.
- Insurance age: The age the insurance company uses to calculate your premiums. This will be your current age or, if you have a birthday coming up, the age you’re about to turn.
- Non-participating: This means the insured won’t receive dividends because the policy doesn’t accumulate cash value.
- Face value: How much your policy is worth.
- Rating: Insurers assign applicants a classification during the underwriting process based on health status, lifestyle, family history and other factors. The cost of your premiums is determined by your rating.
- Level premiums: The premiums and coverage remain the same price throughout the policy.
- Lapsed: When your policy is terminated and you no longer have coverage, typically due to missed payments.
Get Coverage From Americo Senior Life
Now that you’re on your way to understanding life insurance, Americo Senior Life can help you get started finding a policy that’s right for your needs and budget. Whole life insurance policies for seniors from Americo Financial Life and Annuity Insurance Company, sold by Americo Senior Life, offer stable premiums, a quick application process and enough coverage to provide you and your family financial peace of mind. Apply online today and get pre-approved in minutes.