Q: Will I need insurance upon retirement?
The need for a life insurance policy will heavily depend on your financial condition. Social security and retirement plans from years of employment provide continuous income to retirees and to dependents after death.
There are also life insurance policies that offer accelerated death benefit riders to be used to pay off nursing home costs. However all these options do not provide the same amount of protection and security as long-term life insurance.
Q: Will the insurer provide payout in the case of suicide or providing false information during application?
Most life insurance providers can decline to give the payout in the first two years after policy purchase if the cause of death is suicide or if found that a policy owner provided inaccurate information during the application process. This is referred to as material misrepresentation, meaning a policy owner intentionally provided false information about a medical condition.
In the case of policy owners giving a different age to enjoy lower insurance premium payments, the insurer may only reduce the death benefit instead.
If any material representation was discovered after two years, the insurer cannot contest claims as long as you have paid your monthly premiums.
Q: What will happen if I skip payments?
Policy owners can still pay premiums without interest charged within the 30-day grace period. In the case that you have missed payment within the grace period and you suddenly die, your beneficiaries will not receive any death benefit.
If your policy has lapsed, you can still reinstate the policy by paying all overdue premiums plus interest.