Book Opener

When buying term life insurance, you should select a policy thatcan be renewed at the end of each term, regardless of your health. Youshould also ask for a convertible policy, one that can be exchanged fora cash value policy at a later date, regardless of the state of your health.Term insurance offers protection alone, in contrast to straight life insurance,which combines protection with a savings plan.Exemptions from RiskSome states do not allow beneficiaries to receive life insurance proceedsif the insured is legally executed or if the insured is killed by thepolice while trying to avoid capture. In most cases, the courts allow abeneficiary to receive benefits under a life insurance policy when theinsured is murdered, except when the murderer is the beneficiary.Sometimes people lie about their age to obtain insurance at a lowerpremium. In such cases, the insurer will still be required to pay a claim,but only based on the amount of insurance that could have been purchasedon the basis of the true age of the insured for the premiums thatwere paid.The insurer may cancel the policy if the insured makes false statements.It is unjust and unlawful, however, for the insurer to collect premiumsfor many years and then, upon the death of the insured, refuseto pay because of misrepresentation.Insurance OnlineEntering into agreements to buy insurance is sometimes frustrating.Shopping for the right coverage on the Internet can be convenient. It can alsobe confusing because there are so many companies out there. Several majorinsurance companies have recently joined forces to create one “market place”site. This site will allow consumers to compare coverage offered by thesecompanies. Customers will be able to immediately buy coverage from this sitewith a credit card. Until now, customers had to hop from one company’s Website to another. Then they had to contact the company directly. The new sitepromises a more convenient way to shop for insurance. (Source: New YorkTimes, February 14, 2001)Connect Visit the Web sites of a large insurance company to see if it is part ofthis new way of shopping for insurance.758 Unit 7: Planning for the Future