This is question is very popular among our life insurance FAQs.  Exclusions are issued by insurance companies when there are certain activities that are too dangerous to be covered by life insurance. It’s fairly common for insurance companies to exclude coverage for dangerous hobbies, such as scuba diving or mountain climbing, or during travel to countries where the government has issued an advisory. (After all, unless someone’s forcing you to scale a mountain at gunpoint, these dangerous activities are probably voluntary).

If you have an exclusion on your policy and you die while participating in an excluded event, your insurer will not pay the death benefit.

However, these events will only be excluded for people who have typically engaged in the specific event prior to purchasing the policy. For example, if you are a frequent skydiver, your insurance company might specify that you will not be covered if you pass away while skydiving. However if you are not a frequent skydiver, your insurance company will not exclude skydiving from your policy.

Additionally, during the first 2 years of a policy, your life insurer will not pay your death benefit if your cause of death is suicide.

A hard topic to cover, but a necessary one. Given the risk of anti-selection when it comes to suicide (for example, someone buying life insurance right before taking their own lives), insurance companies usually exclude death benefits claims as a result of a suicide in the first two years.

Not unless you have a joint insurance policy (more on this here).  The truth is, joint policies are a lot less flexible than individual policies. Having separate single life insurance policies avoids these sorts of issues.

We recommend that you and your spouse complete our advice engine separately and buy individual life insurance policies.

Premiums are calculated individually for each policyholder and are based on several different factors including your age, gender, health status, smoking history and hobbies.

The first quote you see will be based entirely on your age and gender. Once your insurer completes their underwriting (this is the part where they ask you about your health and medical history) they will potentially send you a revised quote that factors in your health status. This means that you first quote can go up or down based on the information they collect.

Your premiums will remain the same for the entire length of your term (usually 10 years, 20 years or up to age 65). As long as you keep paying premiums, they will never increase.

Premiums can be paid monthly, quarterly, semi-annually, or annually.

Insurers generally require that premiums are automatically withdrawn from your bank account. We collect your bank account details in the application process.

Premiums paid for a life insurance policy are not tax deductible.

Death benefits paid out to your beneficiaries will not be taxed. Your family will keep the entire amount.

Insurance companies generally specify a grace period (usually 30 days) which acts as a cushion to ensure coverage is not cancelled if a payment is missed. If a payment is not received within this period of time (or grace period) from the date a payment is due, the insurance policy is cancelled.

This will depend on the exact terms in your insurance policy.

It is very common for insurers to allow you to decrease your coverage amount throughout the term of your policy.

However, increasing your coverage amount is a little trickier. Insurance companies usually don’t allow this (or at least cap this) to avoid ‘anti-selection’. This means that they want to protect themselves against the scenario that one of their customers gets sick and immediately jacks up their insurance coverage. To avoid this, they typically ask policyholders to go through medical underwriting again before letting them increase their coverage.

This is question is very popular among our life insurance FAQs.  Every life insurance is “cancellable”, meaning you have the right to cancel your policy at anytime without having to pay a penalty.

Guaranteed renewability is a policy feature that allows you to renew your term insurance policy at expiration without going through the underwriting process again. In practice, this means that you could renew your life insurance policy whether or not you get sick. The premiums are guaranteed, but they’re usually much higher than your initial premiums. These days, guaranteed renewability is pretty standard on all term life insurance contracts. However, because the renewal premiums are usually very high, if you still need coverage when your policy expires, it generally makes sense to buy a new policy instead of renewing. Don’t worry, when your policy is close to expiring, we’ll do the work and tell you whether to renew or not.

A convertible is a car whose roof can be… (just kidding). If your life insurance policy is convertible, your insurer promises to let you convert your term policy into a permanent policy (some form of whole life or universal life) at any point within your term without making you go through further underwriting.

When you apply for life insurance, the process can take a long time (that’s part of the reason we are looking to disrupt this archaic industry!). Usually the delay is due to the portion of the process after the application is completed (scheduling and completing the underwriting appointment, having your insurer review the information collected, waiting for your policy to be delivered by mail, etc.)

Temporary life insurance is coverage you get during the life insurance application process before your actual policy goes into effect. The coverage amount may be equal to the amount of coverage you’re purchasing, or it could be capped at some amount (for example, $1 Million). There may also be some exclusions in the temporary policy that don’t apply to your full policy (like only covering accidental death vs. death due to health reasons).

Temporary life insurance is free to you as long as you pay the first month’s payment for your life insurance policy. But don’t worry you can always cancel your policy at anytime during the application process or 10 days after the policy is in effect and receive a full refund.

Seem complicated? We will help you through this process each step of the way and make sure we get you the temporary insurance that you need during the application process.

Once the application is approved, the policy will be finalized and delivered to you. You’ll have 10 days to sign a delivery receipt and authorize the payment method to activate the policy.

When the insurer receives your signed copy of the policy and the payment approval, your policy will be in effect.

Beneficiaries are the people who will receive your death benefit if you pass away. You designate them on your insurance policy. Anyone can be named as a beneficiary. You can even have more than one beneficiary as long as you specify how you want the death benefit to be split among them.

Technically, your insurer should automatically pay the death benefit if you pass away. That is why it is important to check out your beneficiary designations whenever you have a major life change.

However, it’s always a good idea to tell any beneficiary about the policy so he or she will be prepared to take action should a problem arise. Usually, the insurer will require proof of death and a copy of the contract in order to disburse the benefit.

The insurer will pay a life insurance policy’s entire death benefit in one lump sum payment directly to the beneficiary (or split across beneficiaries if there are more than one stated in the policy document).

Reach out to us at info@policyme.com and we will help you through this process immediately.