There are many types of life insurances policies. These different policies, however, share some basic similarities that make up the structure of a life insurance contract. To help you understand your life insurance contract, we have pointed out some basic features of a life insurance contract.
A written contract
A life insurance policy is a written agreement between you and the insurance provider. This contract includes the service you are to receive from the insurance provider in exchange for payment. This contract also includes the conditions of the insurance policy. It consists of the requirements for insurance coverage and limitations of the contract.
Summary of the agreement
A life insurance contract will include an overview of all agreed terms between you and your insurance provider. This overview will include details on who and what is under insurance coverage. Furthermore, you will find dates of coverage, limitations of the coverage and other insurance add-ons purchased here. Your life insurance contract will also include your name and contact address and that of your insurance agent as well.
Statement of features of the contract and its limitations
This section of your life insurance contract will include detailed information on the features and advantages of the life insurance policy you have chosen. If clauses of the life insurance policy exist, they will be listed. Here you will see the limitations of the life insurance policy and things excluded from the insurance coverage.
Options for coverage
If your life insurance policy requires that you make a choice concerning a particular issue, your life insurance contract will contain an options section where the explanations of various options are available. The description of available options is to help you make an informed decision.
Riders are essentially add-on options that you can purchase alongside your life insurance policy. Riders afford you specific benefits that are not available with the life insurance policy alone. Your life insurance contract will contain a rider section where any purchased riders will be listed and explained. Any limitations, clauses or exclusion of the riders are in the life insurance contract.
In sum, it is crucial that you understand your life insurance contract before signing it. It is a legally binding agreement. If you are unsure of the terms of the contract, we advise that you inquire from the insurance provider or their agent to rectify any source of confusion.