What is life insurance and how does it work?
1. life insurance
Characteristics
- It can be hired individually or collectively.
- Your hiring is voluntary.
- It has a defined term, temporary contracts are for a defined period and whole life contracts are until the death of the insured.
- Establishes a maximum age for the insured to join the policy.
- Establishes a maximum age of the insured at which coverage will be provided.
- A statement of health is generally required before joining the policy.
- The insured must take into account if there are deficiencies stipulated in the policy, their characteristics and, if so, if they meet their needs.
- There are different types of life insurance: temporary, whole life, flexible life, with savings, tax relief, etc.
Typically these include
- Risky activities or sports, such as extreme sports, handling of explosives, work at height, etc.; or they could be accepted by the insurance company with an increase in the premium.
- Pre-existing illnesses and health conditions, which could be accepted with an increase in premium.
- Suicid3 before a certain period, the death penalty or participation of the insured in a crime, participation in war or terrorist acts, etc.
Exclusion of coverage for pre-existing diseases or health conditions:
The inclusion in the general conditions of the policy of exclusions from coverage for pre-existing illnesses or illnesses must expressly state that these correspond to illnesses, ailments or health situations diagnosed or known by the insured or by the person contracting on their behalf, before the insurance contracting.
The insured will be obliged to sincerely declare all the circumstances requested by the insurer to identify the risk and assess its extent.
In order to provide the statement referred to in the preceding paragraph, it will be sufficient for the contracting party to inform the tenor of what the insurer requests, about the facts or circumstances known to him and serve to identify the risk and assess its extent.
Cautions and Warnings
When contracting life insurance, prior to agreeing to the conditions offered by the Insurance Company, it is important to take into account the following recommendations:
Read carefully and make sure you understand the insurance proposal before signing the contract, as well as the general conditions of the policy, which can be consulted in the CMF policy depository with the respective code (Code POLXXXXXX).
Before signing the insurance proposal, be clear: 1. How and under what conditions the insurance is renewed. 2. How the cost of the insurance will be readjusted, in case of renewal.
3. In which cases the insurance will not pay. 4. The requirements to collect the insurance. 5. The period of coverage and validity of the insurance.
Ask the insurer or insurance broker for your contract and verify that the particular conditions correspond to what was agreed. In the case of group insurance, through the policyholder, the insurance company must provide each of the insured with a copy of the policy or, at least, a certificate evidencing coverage. In the latter case, both the insurer and the policyholder and broker must keep a copy of the policy available to the interested parties.