5 Tips for a Solid Life Insurance Policy

Here are five ways to ensure yourbeneficiaries get what they are owed from your life insurance policy:

1. Don’t lie.  If a lifeinsurer finds out you lied on your life insurance application during thetwo-year contestability period, the policy may be cancelled or face higherpremiums.  If it’s a big lie, it could bedeemed fraud and they could rescind the policy even after the two-year period.
2. Make premium payments on time. Most life insurance companies offer a 30 or 60-day grace period if youmiss a payment.  But if you let yourpolicy lapse, your beneficiaries will be out of luck.
3. Inform loved ones.  Ifbeneficiaries are unaware they are beneficiaries, they will probably still getpaid, but the process is going to be more difficult.  Most companies are not diligent when trackingdown beneficiaries, so let your loved ones know about the policy.
4. Name secondary and final beneficiaries.  Otherwise, the proceeds go into your estateand are subject to probate.
5. Don’t kill yourself.  Mostlife insurance policies have a two-year exclusionary period coveringsuicide.  And some insurers will denyclaims if you don’t disclose a high-risk hobby that kills you.

See 5 Mistakes That Kill Life Insurance Claims, Fox Business, June 20,2013.