Even though term life insurance is relatively simple, it can be easy to get policy features confused with other types of life insurance. Here are the top things to know about term life:
There’s No Payout When a Term Life Insurance Policy Ends
Since there’s no cash value account in term life insurance, stopping payment and walking away means the policy will end without any reimbursement and you will lose the coverage. The life insurance policy is a legal contract, and both sides must stick to the contract. One of the obligations of the insurance company is to make the payout only to those named as a beneficiary.
The life insurance company is not allowed to decide on its own who should get paid, or who deserves the money. It must pay the person listed. Disputing a beneficiary requires a potentially long court process and could be a losing battle. That’s why it’s essential to keep yourIt’s easy to change your beneficiary any time by filling out a form from the insurance company.Speaking of beneficiaries, you don’t want to name minor children as beneficiaries.
It’s a situation best avoided because court fees will eat into the funds, and the guardian may not know your wishes for how the money should be used. You Can Probably Change Your Term Life Insurance Policy Into a Permanent Policy
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