If you have previous injuries prior to taking out life insurance, be ware that you will pay higher premiums if you are accepted for a policy. Thus, most people that pose a risk are labeled under the “Rated Acceptance Terms,” which means that you are a higher than average risk and you will pay higher premiums for coverage.
Sounds unfair and to a degree it is if you were victimized in an incident. Still, you will receive the Rated premiums if you have previous injuries. Most insurance companies may require that you take a medical examination, even if they have reviewed your medical records. Therefore, it pays to be honest to avoid losing your chance of getting coverage. After all, the coverage now will add up later when your family needs it the most. As a candidate under the Rated premiums, I my self would prefer to pay higher premiums now and avoid stress to my family later. I experienced the most frustrating experience of life when my mother passed on, and my father had no life insurance coverage. We struggled to pay for her funeral expenses, and believe me it left bitterness inside, since my father did not consider the inevitable.
Few companies’ may not apply medical exams; however, many will especially if you pose risks. Most companies’ will request the medical records from your physician under your consent and are often happy with the results, however, if the records have history then the medical exam is required, and often this slows the process of getting your coverage.
If you have a mortgage, or currently closing a mortgage deal you are expected to take out life insurance in most instances. Life insurance is often required since it is an additional source of security to the lender that money is available in the event you should die. The life insurance policies will often payout a lump sum of cash to the family members if you die, and this is often applied to payoff the mortgage. However, most companies will charge higher fees when you include mortgage in your life insurance policy.
Some companies consider mortgages in different light. For example, if you have “Interest Only Mortgage” loans then you will need “Level Coverage Life” policies, since you will need a ‘fixed and constant’ cash assurance. The reason for this is that the Interest Only loans allow the buyer to payoff the interest first and then the capital later. The Level Coverage Insurance pays off the capital on the mortgage, thus since the buyer is only paying interest now the capital later will be much higher. Therefore, the company will charge higher premiums likely, since the money applied to your life insurance is the sum you will receive if you should die. Therefore, the company (when mortgage is involved) is paying for burial plus mortgage. If you have a mortgage and a spouse joining you in the purchase of the home, then you want to consider a Joint Plan, since this will lower your premiums slightly.
Of course, if you or your spouse is under the Rated Premium plans then the premiums will go up. One of the disadvantages of Joint life coverage is that the term is obsolete once the first party dies. Thus, the plan is often called “First Life” since it will cover one or the other in the event a policyholder dies. Therefore, if the spouse does not have a single policy when the first policyholder dies, he/she will not have coverage and it could lead to bigger problems since the person may not be able to get coverage later.
Still, if the second party were able to get coverage, the person would pay higher premiums most likely. Finally, if you have mortgage to consider you may want to consider taking out Critical Ill or Terminal Ill coverage, since this will provide additional coverage when the inevitable occurs. Furthermore, it might be in your best interest to take out separate policies, rather than joint policies, since you may pay more now, but you and your spouse will not suffer later.
Authored by Michael Bens. For more great information about all forms of insurance visit our free online insurance publication the Gabae Insurance Source to find the information you're looking for!
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