Most people hate the thought of reading a life insurance policy (or any insurance policy, for that matter). However, if you can find the time and muster the patience, it’s probably a good idea to read through your policy. If you do, you’ll understand your policy better and gain an understanding of your rights and obligations under the contract.
Identifies the insurance company and the type of plan, offers your right to return the policy within 21 days if you’re not satisfied, and is signed by an insurance company officer.
Schedule of Benefits & Specifications Page
Describes the amount of benefits, the premium and other charges, the insured, the issue date, the policy number, and the premium class (e.g., preferred, standard).
Show future premium projections or guaranteed cash values, depending on the type of policy.
A section devoted to definitions of the terms used in the policy.
Explanation of Rights
As the owner, you have certain privileges of ownership, including the right to transfer or assign the policy, the right to change the beneficiary, the right to receive the cash value and dividends (if applicable), and the right to borrow against the cash value (again, if applicable).
Includes instructions on how to make a claim and information about the choices your beneficiary has regarding the death benefit.
Benefits & Changes to Policy
Riders (benefits you added to the standard policy) or endorsements (changes to the standard policy), if any, will be attached to the policy along with a copy of your application.
Despite the lack of a uniform contract, most states have enacted legislation that makes certain policy provisions mandatory, and the commissioner of insurance must approve the final wording adopted by the insurance company. Even if certain provisions are not required by law, competition between companies generally forces them to be very similar. Here are some common provisions to look for when you read your policy.