COMMERCE 4FP3 Chapter Notes - Chapter 9: Waiting Period, Co-Insurance, Copayment
23 Jan 2017
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Once you die, the company deducts interest and fees and gives your heirs what"s left. Some companies will a) lend up to 85% of the policy"s value and/or b) will pay your premiums (once you die?) Many families are inadequately (too stringent) or improperly covered (wrong kind of coverage) This policy protects the beneficiaries from financial losses caused by the insured"s death (provides liquidity at the time of death) If an endowment policy is signed, money is paid to the insured if he or she is alive on the maturity date. Although premium amount depends on the probability of survival until the insured"s next birthday, it also depends if the insured is at high or low risk of making payments plus any administration fees. Based on the rule that a typical family will need approximately 70% of your salary for seven years before they adjust to the financial consequences of your death.
