The ultimate goal of purchasing term life insurance is to ensure that our family maintains its lifestyle, dreams, and goals even in our absence.
People who buy term life insurance expect two things. First, the money must be paid, and second, it must be paid smoothly. The payment of the money depends on the declarations being correct and the premiums being paid on time. But even after all that, there may be other obstacles that could make it difficult to claim.
Here are a few things to keep in mind to ensure your family’s experience is hassle-free.
Given the nature of term life insurance, you are completely irrelevant to the claims process. Therefore, you should keep your policy and any other important documents in a safe place and inform your attorney. You can also create an insurance account online, store all relevant documents digitally, and share account details with your authorized representative. This ensures that they have easy access to documents when reporting the claim.
If something goes wrong at the time of reporting, you won’t be there with your candidate to set things right again. To make sure you don’t leave out any details that might upset you later, it’s important that you sit down with your candidate, walk them through the application process, and give them a list of the documents they need to submit and whether you’ve purchased them. If you have an insurance policy through a financial adviser, be sure to get in touch with their representative and share their contact details, so they can easily help your family obtain the claim amount in the event of a claim.
By law, your creditors are entitled to the installment insurance payment received from your representative. Only when all your loans and debts have been paid off will your agent be able to collect the money. Additionally, there could also be family members who have a claim based on probate law.
This can be very embarrassing, but there is a way out if you are married and a man. You can get your policy under the Married Women’s Property Act, which is a sure way to ensure that the insurance claim is permanently paid to your wife and children and no one else. And then they can decide which payments to make first and prioritize their needs accordingly.
Note: You can only sign the MWP Addendum at the time of policy purchase. And once MWP has been added to your term life insurance, no one can change or remove it; remains valid even in case of divorce.
When your candidate receives the claim after her death, he suddenly has a large balance in his bank account. If they don’t have any prior knowledge or experience, it can be difficult for them to handle it. To make sure they don’t waste money on bad investments, you need to choose an option that pays the claim in the most sensible way.
– Payment of a lump sum
With this option, your authorized representative will receive the full amount of the claim in one payment. You may choose this option if you have large loans or debts that you prefer to pay off quickly. Once your representative receives the amount, you can immediately repay the loans and become debt free. You can also choose this option if you have not taken out a loan but are absolutely sure that your beneficiary knows what to do with a large amount of money.
–Monthly rent payment
If you choose this option, the claim amount will be paid to your beneficiary in fixed monthly installments over a specified period of time. You can choose this option if you do not have any loans to pay and you want your family to have a sustained and regular income for their monthly expenses.