Life Insurance Limitations

If you are in the market for a life insurance policy, there are some limitations that you should keep in mind before committing yourself to a policy or otherwise making a final decision. Generally, if you are only purchasing a policy that pays out $5000-$10,000, the limitations are minuscule. You will normally not have to undergo a physical exam or any other in person examination in order to be covered. And coverage can generally be purchased for pennies per day. In fact, if you are employed, many larger employers may provide you with a life insurance benefit of up to $10,000 as part of your employment benefits that you do not even have to pay for.

Among the most common limitations with regard to life insurance is known as a suicide limitation. Simply put, if you purchase a life's insurance policy and then commit suicide, many companies are released from their obligation to pay out on your policy. Depending on the policy, this limitation may be in effect for only the first couple of year or may be imposed for the life of the policy. It is very important to fully understand this limitation.

Another common limitation regarding life insurance has to do with preexisting conditions. Generally, once you are approved for a policy, you preexisting medical conditions have already been determined acceptable and your policy will be honored even if your condition(s) contribute to your death. However, if you are dishonest during the application process with regard to your actual medical condition and the insurance company determines that you attempted to defraud them as such, they are generally within their rights to deny payment on your policy.

Another thing to keep in mind when considering any limitations on your life insurance policy is the fact that, if you are the primary bread winner in your household, they are probably counting on you for support. Most life insurance policies only pay out in the event of your actual demise, but what happens to your family if you are grievously injured or otherwise unable to work due to illness or injury? Because standard life insurance policies are not designed to pay out under these kinds of circumstances, it is generally advisable to purchase supplemental coverage that is intended to pay out in the event that you are no longer able to work.

The bottom line is that financial security is imperative, and purchasing a life insurance policy that you understand and which will provide for your family when you are unable to is one step that you can take to ensure that your loved ones will be protected after you are gone.

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