Important Things You Should Know About Your Life Insurance Policy09 Jun 2022
Life insurance is a contract between an insurer and a policy owner. If you are insured, understanding your policy ensures you can enhance your financial protection while also avoid leaving gaps. A lack of understanding may cause unwanted surprises which may have adverse financial consequences.
The thing is...insurance policies can be difficult to understand for policyholders! Don’t fret! We’ve listed down the key things you should understand from your insurance policy to help you on your financial protection journey.
Type of plan
Whether it’s life insurance, medical insurance, or critical illness coverage, it’s important to understand the purpose of your insurance. Understanding the type of plan gives you a clearer understanding of your risks and why you are paying your insurance premiums.
|Type of plan||Goal|
A lump sum payment is provided to the beneficiary as financial support in the event of death or disability of the insured.
To cover your medical expenses.
|Critical Illness Coverage||
Provides you a lump sum payment upon a critical illness diagnosis as financial support for any loss-of-income due to inability to work or to pay any cost overrun if medical insurance fall short. Giving you peace of mind to focus on your recovery and treatment.
A life insurance policy which helps the policyholder save over a period of time. The policyholder can get a lump sum amount on the policy maturity if they survive the policy term.
Know what you’re covered for and your coverage limit. Understand the particular events or items in which you will receive coverage. For example, does your life insurance cover accidental death? Does your medical insurance have a limit on how much you can claim? Look out for exclusions which are the instances for which the insurance provider does not provide coverage.
To calculate how much coverage you need, use our financial calculator.
Beneficiaries are to whom the benefit would be payable to. Nominating a beneficiary will avoid delay of payable benefits which can take years. For life insurance, the beneficiary or beneficiaries should be informed and have a copy so they are aware and can make a claim.
On how to nominate a beneficiary, check out our article here.
They are part of the underwriting requirements the insured accepts to maintain coverage. If a condition is breached, the policy can become void or the claim may be refused. For example, a claim can be refused if the insured did not declare that they smoke, have a high-risk occupation or that they have a family medical history.
Other Key Terms
The amount payable on the occurrence of an insured event under the insurance policy.
The amount paid for a contract of insurance.
|Frequency of payment||
For example, yearly, semi-annually, or monthly. The lower your frequency, the less you pay.
The date when the coverage term expires. Some policies provide a maturity benefit which is an amount the insurance providers pay you after the maturity of the policy.
Optional provisions that adjust the basic insurance policy. Adds benefits or amends the terms of a basic insurance policy. It’s usually made available in an investment-linked insurance plan.
The above will help give a good overview of your policy. It will also help you review your policy and adjust it if needed according to your life circumstances. A good insurance provider will help you understand your insurance policy. If you have a Gibraltar BSN insurance policy and have any queries regarding it, please do not hesitate to contact us through any of our channels here.