What to Consider When Purchasing Life Insurance

The objective of life insurance is to provide compensation to the beneficiaries or legal heirs in case of death of the insured. For this reason, there are fundamentals that must be taken into consideration before making a purchase of life insurance.

First, it is vital that those who buy a life insurance is transmitted to its beneficiaries insurance. This, because it must be the beneficiary who processed the payment of compensation as the company has no legal obligation to contact them. In that sense you should recognizes that you can advance the issue, being able to make changes through new insurance regulations.

When it is expected at time of purchase insurance is that the recipient is a person close to lay before the company at the time of his death. So the percentage of unpaid insurance policies is very low. If it is not, that is, the person dies and the beneficiary does not know his status, it will be the company that realizes the insured’s death to occur late payment of the policy.

The insurance contract may stipulate a maximum or not to collect compensation. If it does not stipulate a fixed term, in legal terms established a ceiling period of up to 4 years after the death of the insured produced to collect the benefit. After this time, remains the allocation of the company whether or not to process the respective and give compensation.

It is therefore important that the recipient knows not only the type of policy that the policyholder has, but any change is made and where it is stored.

However, if you have any doubts about the existence of life insurance, anyone can go to the Superintendency of Securities and Insurance (SVS), presenting the death certificate and proof of insurance to be an interested party in order that the institution send an official letter to insurance companies and they answer whether or not insurance for the deceased.

We must also bear in mind that there are specific cases in which there is no need to pay insurance compensation. These exclusions are given in extreme cases as the beneficiary has been the cause of death of the insured in case of fraud as the person has misrepresented his health or declaration event of nuclear war, among others. Thus it is not applicable because the company pays the sum insured that never existed.

How long does the company distribute the amount of compensation to the beneficiaries? The executive says that if its not to do any investigation because the death was transparent, the payment may occur even a week after submitting the papers. When the causes of death are uncertain, companies take their time to discuss the incident.

The insured should also be aware that the policy should be clearly spelled out the beginning and the end of its period of validity. And when coverage ends at an advanced age - that is, over 60 years will be very difficult to renew or take out new insurance.

Moreover, not all companies require a medical examination when purchasing a life insurance. It all depends on the insurance policy and the client’s age and type of insurance you request.