COPYRIGHTED MATERIAL
TERM LIFE INSURANCE
WHOLE LIFE INSURANCE
UNIVERSAL LIFE INSURANCE
• coverage is for a specific period of years, then expires. • purchased during insured’s income earning years. • premiums increase as insured ages. • provides replacement income for the insured’s family upon their death. • doesn’t build cash value.
• provides coverage for the insured’s whole lifetime. • coverage does not expire. • premiums are higher than term but will not change over the insured’s lifetime. • builds cash value.
• permanent life insurance with lifetime coverage. • insured can raise or lower their premium or death benefit throughout their lifetime. • builds cash value.
Reflect on Learning: Can you recall and compare the features of term life, whole life, and universal life insurance? Term life is in place for a term of years, premiums increase, it’s meant to replace income, and has an expiration date. Whole life: In place for the whole life of the insured, doesn’t expire, higher premiums than term, premiums are fixed, builds cash value; Universal: permanent but flexible premiums and coverage, builds cash value. III. Making a Claim It’s pretty much a given that, at some point in your life you will have an accident or other loss-causing event requiring you to make a claim on an insurance policy. It could be a homeowner’s insurance policy, car insurance, or any other type of coverage. Most insurance companies provide loads of information on their websites about how to efficiently file a claim . In fact, many claims can actually be filed, at least in part, through the insurance company’s website. When you file a claim, it is assigned to a claims adjuster who is an employee of the insurance company. They review the facts of the claim, the estimated repair costs, medical bills, and all other claim-related documents to determine the value of the claim. How the claim is handled and how much interaction you’ll have with the adjuster depends on the size and type of claim. A $1000 car repair claim will be far easier to resolve than a $700,000 post-fire home and contents replacement claim, or a claim involving serious bodily injury or death. Nevertheless, with regard to any insurance claim, experts advise: Be Informed. Know your policy terms. Read and understand the policy before you are in the position of having to make a claim. If there is something in the policy you don’t understand or think is wrong straighten it out with the insurer right away . Be Timely. Don’t delay. Report a loss to your insurance carrier as soon as possible. Be aware of and comply with time limits for filing claims or getting repair estimates. This obligation runs both ways. Many insurance companies delay claims or respond slowly to claims. Stay on top of your claim. Read and respond to any letters or notices the insurance company send you. Some claims, particularly personal injury claims, can take months to resolve. PRODUCT PREVIEW
THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY 295
Made with FlippingBook - Online catalogs