What Is Life Insurance California?

Life Insurance California is a contract between an insurer and a policyholder. In which, the insurer guarantees payment of a death benefit to the named beneficiaries. However, benefits can only be given upon the death of the insured. The insurance company promises a death benefit, in consideration of the payment of premium by the insured. Policyholders typically pay their policy premium on either monthly payment or annually. Besides, they also include funeral expenses as part of the policy’s benefits.

Insurance policy is a legal contract that also includes limitations and exclusions. Particular exclusions are written on the declaration page of the policy. In the states of California, it is stated that only 52% of the population has life insurance. In addition to that, half of it was underinsured based on the survey done by LIMRA. Life insurance policy is often affordable; however, some individuals think it’s expensive. Go to our contact us page and get a free quote now. Start a way better protection for your family today.

Life Insurance

How Much Is Life Insurance California?

Insurance companies calculate insurance premiums by the consideration of specific factors. Insurance providers use the mortality rate table; this table shows the annual death rates of individuals within their line of age. In conclusion, older individuals are more likely to procure death than younger individuals. Besides, this table helps the insurance provider to determine the risk with age accordingly.

Factors To Consider On Calculating A Premium Rate

Personal Medical History is a piece of information that may include the illnesses the policyholder incurs. As well as its surgeries, the results of physical exams and screenings. It may also include information about their immunization history, taken medicines, and allergies — also, the policyholder’s health habits, such as the policyholder’s diet and exercise routine.

In medicine, family medical history is information that includes the disorders of the direct blood relative of the policyholder. Immediate blood relatives include parents, grandparents, siblings, cousins, aunts, and uncles. Also, medical history consists of the diseases the family members have suffered. The best way to get the family medical history of the policyholder is to talk to the policyholder’s family.

Driving records of the policyholder may include the following information;

  • Convictions of the driver
  • Drivers accident history
  • Drivers license
  • License suspension and tickets, violations

 

Policyholders with a clean driving record often garner a lower premium rate.

Body mass index is the person’s height in square meters and weight in kilograms. If the BMI of the policyholder is high, it is an indicator of obesity, that insurance companies may conclude it as a risk. However, the Body Mass Index is not a diagnostic of the health of an individual.

How Claim-Payment Works?

Upon the death of the insured, the insurance provider will require the beneficiaries an acceptable proof of the death of the insured. However, in most cases, insurance companies do not provide payments to recipients. Specifically, if the death of the insured is suspicious, and the premium of the policyholder is expensive. However, some companies take consideration of this scenario, but they will investigate the whole situation and decide whether to pay or not the beneficiaries.

Payments or benefits of life insurance policy is often one total payment. However, some insurance companies pay the benefits in an installment which is paid until a specific period. Besides, some insurance providers pay the benefits in an annuity or give the benefits while the insured is alive.

Categories Of Life Insurance Policy Holders

Some insurance providers separate policyholders into four general categories. These include tobacco, preferred best, preferred, and standard, where most people are in this category.

The policyholder who is in this category, pays a higher premium rate due to the high mortality rate. Based on the research done by the U.S Department of Health and Human Services, tobacco smoking is the top five causes of mortality in the state. Tobacco smoking is liable for more than four hundred thousand deaths a year. Besides, there are more than 50,000 deaths due to secondhand smoking. Also, smoking tobacco causes 1,300 deaths every day.

Individuals in this category mean that he has no adverse medical history and is not under medication. Besides, this individual has no younger-onset of diabetes and other medical conditions. Lastly, the individual has no family history of cancer.

Preferred means that the individual has a family history of medical conditions or diseases. Furthermore, the individual is in an ongoing medication.

What Is Life Insurance California?

1. Investment Policy

The objective of this policy is to expand the growth of life insurance capital by single premiums. Specific forms of life investment policy are Universal life, variable life, and whole life policies.

Universal Life

Universal life insurance is a type of insurance that is sold in the United States. Life insurance is an insurance that has investment savings. The majority of comprehensive life insurance policy requires a minimum amount of payment to keep the account active. Also, this policy can accumulate cash value that could earn interest through the current market. Cash value is the amount, the policyholder would get if he decides to surrender his policy to the insurer. Cash value is like an investment, and it grows tax-free with interest. Besides, the cash value can be used to pay the policyholders premium and as collateral to a loan.

Variable Life

Variable life is an insurance policy that is designed to build a cash value. In variable life, the cash value can be used as an investment in separate accounts. Variable insurance is often referred to as permanent life insurance since it can provide payments to the beneficiaries anytime the insured dies. However, refunds will only be applicable as long as there is enough cash value to pay the policy premium of the insured.

Whole Life

Whole life insurance or often called straight life insurance, is guaranteed protection to remain valid for the entire lifetime of the insured, provided that the required monthly or annual payment for the policy is paid. Whole life insurance is an insurance that could pay the death benefit to the beneficiaries, as long as the payment has been met before or until its maturity date. However, this kind of insurance is fixed for a limited term. This insurance is set based on the age of the policyholder. Typical whole life insurance is payable until the policyholder reaches the age of 65.

2. Protection Policy

A protection policy is a policy that could provide benefits to the beneficiary. Typically, payments for the benefits of the policy are given in one single payment and not installment.

Contract Terms
  • The policy becomes null and void if the cause of the insured’s death is due to suicide clauses within a specific time, usually if the time is within two years after the purchase date of the policy. 
  • The insurance companies can also nullify the policy of the policyholder if the insured misrepresents its policy. 
  • Insurance companies often give the policyholder a contestability period which is 2 years after the effective date of the policy. 
  • The insurer has a right to decline or decide whether to pay a claim or not if the basis of the policyholder’s claim is a misrepresentation.