Most people are unaware most insurance policies are different. An auto insurance policy is different from a life insurance policy and a life insurance policy will be different from a long-term care or disability policy. While this can be confusing for someone interested in purchasing multiple insurance policies, the good news is that all of them share a few common items. Once you understand what they are you should be able to comprehend your insurance policy, no matter what type of insurance it is.
Always keep in mind to prevent a lost life insurance policy,
keep it in a safe place where your loved ones and family members can locate it.
Registering on a central life insurance database is something everyone with
insurance should consider.
The first thing to understand is that an insurance policy is
a written contract, an agreement, between the insured (you) and the insurance
agency. Every policy has an insuring clause which is, basically, a generalized
statement of what coverage the insurance company is responsible for. If you pay
the premiums and make sure you keep to the conditions within the policy
wording, the insurance company agrees to make payment to you (and/or
beneficiaries) in the instance of a loss. Essentially it means any financial
risk is deflected from you and transferred to the insurance company.
Every policy is also sectioned off, with each section
defining the policy terms, types of coverage, the rights and responsibilities
of both parties, any exclusions or limitations and any other types of optional
coverage you have selected. The first page usually begins with a summary of the
agreement between the insurance company and you (the insured). This
Declarations Page gives the information about who is covered, what's covered,
the applicable dates for coverage and the amount of any premiums. It will also
have the policy number listed, your name and address, and the name and address
of the insurance agent. It can also have other important information such as
coverage limits.
There should also be several provisions in your policy.
These describe the policy features and types of benefits you would expect in
the event of a loss. The policy will also explain any necessary requirements
and the rights and responsibilities for each party. Other provisions in the
contract may be required by law, either state or federal. These provisions are
required and designed to protect you. There will also be a section, or
sections, for any exclusions denying or precluding coverage depending on the
circumstances.
If you had the option of choosing any other options when you
applied for the insurance policy, there will also be a section for these,
explaining what they are and any related information. This can be information about
dividend options (if you have a cash value life insurance policy) or any
optional auto coverage for an auto plan (such as additional bodily injury
coverage).
If you are paying additional premium for any riders, there
will be sections regarding the additional rider coverage – any coverage
considered above and beyond the basic contract. If there are any endorsements
or amendments added to the standard contract, the insurance company may add
that information as well, be it at time of issue or thereafter.
Remember, your insurance policy is a legal contract. If you
don't understand any portion of the wording or provisions, it is best to get
help from your insurance agent first. Make sure they explain everything to your satisfaction and
understanding before signing.
“TO BE THE BEST IN SERVING OUR MEMBERS BY PROVIDING PEACE OF MIND THAT THEIR BENEFICIARIES RECEIVE THEIR INHERITANCE”
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