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Started By
Message
Life Insurance
Posted on 3/27/12 at 8:00 am
Posted on 3/27/12 at 8:00 am
So I purchased a term life policy one year ago today. At the time I was tested and what not, I dipped. USAA requires that you go 1 year tobacco free before you get a rate adjustment. I am on day 382, not that I have been counting, of being tobacco free. I have applied for my rate adjustment and will be retested again soon, which should knock my rate down from $51/mo to around $20/mo. Big damn difference.
My question is this, do insurance companies look for reasons not to pay policies? For instance, lets say I have a smoke or dip or something 5 years from now at a party, then die on the way home. I am assuming they will run test on me and if they find nicotine in my system will they not pay? What am I missing in regards to life insurance?
Just ran some quick numbers that does not include interest and if I pay $20/mo for 20 years, it comes out to $4800. My policy is way more than that. Are they banking on me living the next 20 years?
Just curious as to how it works.
My question is this, do insurance companies look for reasons not to pay policies? For instance, lets say I have a smoke or dip or something 5 years from now at a party, then die on the way home. I am assuming they will run test on me and if they find nicotine in my system will they not pay? What am I missing in regards to life insurance?
Just ran some quick numbers that does not include interest and if I pay $20/mo for 20 years, it comes out to $4800. My policy is way more than that. Are they banking on me living the next 20 years?
Just curious as to how it works.
3
Posted on 3/27/12 at 8:31 am to OnTheBrink
As long as you are telling the truth at time of the policy signing (or ammendment in this case) and the 2 year contestability period has passed your should be good.
Posted on 3/27/12 at 8:58 am to OnTheBrink
quote:
Are they banking on me living the next 20 years?
Yep, and you're banking you will die. nice thought, huh.
Make sure you are investing to be "self insured" in 20 years.
Posted on 3/28/12 at 3:14 pm to OnTheBrink
The way term works, it is all a big bet. You are saying, I will pay this premium because there is enough risk/things I want to protect, that justify it.
The insurance company is saying, we will allow this little of money to be able to pay for this amount of death benefit because we do not believe we will have to pay the claim.
Term is one big bet with the insurance company. The other poster is correct about the contestibility period.
The insurance company is saying, we will allow this little of money to be able to pay for this amount of death benefit because we do not believe we will have to pay the claim.
Term is one big bet with the insurance company. The other poster is correct about the contestibility period.
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