When someone decides to buy life insurance through one of the Independent Insurance Agents in North Huntingdon PA, this person will need to fill out an application. The life insurance company asks several personal questions that the applicant must answer truthfully or risk any future death benefit being denied to the beneficiaries. What are a few of these questions?
Income and Assets
The applications ask several questions related to physical and mental health. Applicants might expect to see health-related questions on the form, but they might not understand why the application also asks about income, assets and net worth. The reason is that life insurance is not intended to make beneficiaries fabulously wealthy if the policyholder dies. It is intended to compensate for the financial loss that would be connected with the person’s death.
An Example
For instance, people often buy life insurance from Insurance Agents in North Huntingdon PA for the first time when they become parents. The average U.S. resident may not be able to buy a policy that pays $30 million upon their death because the insurance company sees that, to put it bluntly, the person is not worth this much financially. If this individual is bringing in $40,000 a year, the company may be agreeable about issuing a $1 million policy. That would cover more than 20 years of future income and provide for the family.
A Reasonable Option
It may be much more reasonable to take out a policy through an independent organization such as E.F. Barrett Agency Inc. for a lower amount, such as $500,000. Premiums are significantly higher with larger amounts. A spouse or adult children who inherit the $500,000 would be expected to put most of it in savings or investments, which would allow the money to grow.
Occupation and Hobbies
Applications also include questions about the person’s occupation. The company wants to know if the occupation has an unusually high accident rate. Farming, construction, and roofing are some examples. There also may be questions about the person’s hobbies so the company can learn if the applicant engages in risky hobbies like race car driving.
