Insurance Policy Defined
In insurance, generally, the insurance policy is simply a contract between the insured and the insurance company, that determine the exclusions that the insurance company is legally obligated to cover. In return for an initial down payment, called the premium, the insurance company promises to cover certain perils associated with the policy itself, in exchange for payment. This payment is made on a monthly or annual basis. Some companies also offer certain pre-payment protection for a specified time period in the event of a claim. While the primary intent of an insurance policy is to protect the insured from potential losses, often there are other benefits attached.
For example, some insurance policies offer the named insured a grace period after the policy has been issued for a specific amount of time after the insured has died. During this grace period, expenses related to the death of the insured are paid without having to file a claim. This type of payment is often tax deductible and allows the family of the insured to focus on the expenses that they would have been responsible for had the individual not passed. Also, during this time, survivors may be able to make arrangements to care for their elder loved one.
Many states also require the filing of a statement declaring the facts of the case, including any applicable conditions. These statements are usually required for the purpose of obtaining insurance policy limits. The declarations page for an insurance policy provides additional information about the coverage provided. It also provides the policy limits, including the extent of the deductible and whether the insured will be responsible for any costs not covered by the policy. It is advisable to read the statement thoroughly and to clarify anything that is unclear.
A number of insurance policies provide that, in the event of the insured’s death, his estate is automatically distributed to all beneficiaries. The amount of the benefit depends on several factors including the age of the insured at the time of his death, whether the insured had more than one health insurance policy and the insurance policy value at the time of his death. Another factor influencing the distribution of the estate is the insurance policy’s benefit provision and / or premium. Let us know more information about Landscaping Insurance
Many insurance policies also provide for the payment of a fee to the estate of the insured upon the insured person’s death. Generally, the fee is proportional to the excess of the premiums paid by the insurance policy holder over the amount of life benefits the policy holder was expected to receive. However, in some states, the fee may be awarded to the estate of the insured immediately upon death. Premiums must be paid at the time of renewal of an insurance policy and must be renewed at the time of death. Failure to pay the premium on time results in a penalty that may double the total amount of the insurance policy.
In contrast to the death benefit, which is a non-forfeiture benefit, the cash value of a policy is not forfeited upon death. Cash value is simply the insurance policy’s value at the time of death. This amount paid-up is generally less than the face value of the policy. If one dies in an accident or some other event, then his death benefit is paid-up. If he later disposes of the policy, his cash value is returned to him.