If you are curious about what is a life insurance term policy and what are it’s uses and what it can offer, read my article below.
What Is Term Life Insurance Contract?
A contract signed between you and your life insurance company saying that a certain amount of money will be paid to your beneficiaries after your death defines the term life insurance policy.
The insurance will be active only for a specified period of time as long as you fulfil your financial duties.
The Incontestability Of Your Term Policy
The incontestability clause is included in your term life insurance contract. It says that in case of false information, the life insurance company can withdraw your policy within a certain number of years (usually no longer than 2).
Also, if you die before this period is over the claim can be contested by the company and they can limit the payment to existing premiums plus interest. Once the period is over the policy is incontestable. The insurance company cannot withdraw it and they must pay the full amount upon death.
The Suicide Clause
If you decide to kill yourself within a specified period written in the contract (usually 2 years), the company can refuse to pay the claim but if you do it afterwards they have to pay the full amount.
The Misstatement of Age
In case you misstate your age, upon death the company will pay only the amount for your correct age.
Ownership Of The Policy
In most cases a policy’s applicant is the insured and the owner and he has all the decision rights. In some cases the applicant and the insured are not the same person.
For example a parent can insure a minor child, a husband can purchase a policy for his wife and a corporation can buy life insurance for its key employees.