What Causes of Death are not Covered by Life Insurance?

The death of a loved one is hard to take and while a life insurance payout can ease the burden and allow you to continue leaving comfortably, it won’t take the grief or the heartbreak away. What’s more, if that life insurance policy refuses to payout, it can make the situation even worse, adding more stress, anxiety, anger, and frustration to an already emotional period.

But why would a life insurance claim be refused; what are the causes of death that may cause your life insurance coverage to become null and void? If you or a loved one has a life policy, this article could provide some essential information as we look at the reasons a death claim may be refused.

What Causes of Death are Not Covered?

The extent of your life insurance coverage will depend on your specific policy and this is something you should check when filing your life insurance application. Speak with your insurance agent, ask questions, and always do your due diligence so that you know what you’re buying into and what sort of deaths it will provide cover for.

Life insurance policies have something known as a contestability period, which typically lasts for 1 to 2 years and begins as soon as the policy starts. If the policyholder dies during this time, they will investigate and contest the death. 

This is generally true whether her you die of a heart attack, cancer or suicide. However, if this period has passed, they may only contest the death if it results from one of the following.

Suicide

Suicide is a contentious issue where life insurance is concerned. On the one hand, it’s a very serious issue and one that’s often the result of mental health problems, so there are those who believe it is deserving of the same respect as any other illness. 

On the other hand, the life insurance companies are concerned that allowing such coverage will encourage desperate people to kill themselves so their loved ones will be financially secure.

It’s a touchy subject, and that’s why many companies refuse to go anywhere near it. Some will outright refuse to pay out for suicide, but the majority have a suicide clause, whereby they only payout if the death occurs after a specific period of time.

If it occurs before this time, they may return the premiums or pay nothing at all. And if they have reason to believe that the policyholder took their own life just for financial gain, they will almost certainly investigate and may refuse to pay.

Dangerous Hobbies and Driving

If you die in a car accident and it is deemed that you were driving drunk, your policy may not payout. Car accident deaths are common, and this is a cause of death that policies do generally cover, but only when you weren’t doing something illegal or driving recklessly.

Deaths from extreme activities like bungee jumping or skydiving may be questioned, especially if these hobbies were not reported during the application. 

Illegal Acts

Your claim can be denied if you are committing an illegal act at the time of your death. This can include everything from being chased by the police to trespassing. A benefit may also be refused if you die for an intentional drug overdose using non-prescription drugs. 

Smoking or Pre-existing Health Issue

Honesty is key, and if you lie during the application or “forget” to tell them about your smoking status or pre-existing medical conditions, they may refuse to payout. It doesn’t matter if they performed a medical exam or not; the onus is not on them to spot your lie, it’s on you not to tell it in the first place.

This is one of the most common reasons for an insurance contract to be declared void, as applicants go in search of the cheapest premiums they can get and do everything they can to bring those costs down. They may also believe they will get away with their lies, either because they will give up smoking in a few months or years or because they will die from something other than their preexisting condition.

But lying in this manner is risky. You have to ask yourself whether it’s worth paying $100 a month for a valid policy that will payout without issue or $50 for a policy that will likely be refused and will cause endless stress for your beneficiaries.

War

Life insurance benefits generally don’t extend to the battlefield. If you’re a solider on the front line, your risk of death increases significantly, and many insurance policies won’t cover you for this. This is true even if you’re not in active duty at the time you take out the policy. More importantly, it also applies to correspondents and journalists.

You don’t invalidate your policy by going to a war-torn country and reporting, but if you die resulting from that trip, your policy will not payout.

Dismemberment

Your life insurance policy likely won’t pay for dismemberment or critical illness, but there are additional policies and add-ons that will provide cover. You can get these alongside permanent life insurance and term life insurance to provide you with more cover and peace of mind. 

They will come at a significant extra cost, but unlike traditional life insurance, they will payout when you are still alive and may make life easier after experiencing a tragic accident or serious illness.

We recommend focusing on getting life insurance first, securing the amount of coverage you need from a permanent or term life policy, and only then seeing if there is room in your budget for these additional options.

How Often Do Life Insurance Policies Payout?

We have recommended life insurance many times at PocketYourDollars and will continue to do so. We often state that it is essential if you have dependents and want to ensure they’re cared for when you die. But as much as we recommend it and as simple as the process of applying often is, there is one simple fact that we often overlook:

Life insurance companies rarely payout.

It’s a stat you may have seen elsewhere and it’s 100% true. However, contrary to what you might have heard or assumed; this is not the result of a refusal to pay the death benefit when the policyholder passes away. Sure, this accounts for some of those non-payments, but for the most part, it’s down to one of the following:

The Policyholder Survives the Term

The majority of life insurance policies are set to fixed terms, such as 10, 20 or 30 years. If anything happens during this period of time, your loved ones collect your death benefit, but if you survive, the policy ends, no money is paid out, and if you want another policy you will need to pay a larger sum.

The Policyholder Accepts the Cash Value

Whole life insurance policies are like investments crossed with life insurance. Your loved ones get a death benefit if you die, but it also accrues interest and can be cashed out. When this happens, the insurer collects, you get a sum of money, and it feels like a win-win, but in reality, the insurer has just dodged a bullet.

The Policyholder Stops Making Payments

As soon as you stop making your premium payments, you lose cover and you run the risk of your policy being canceled. This is true for pretty much any type of policy and it happens regardless of the policy term. 

Unlike a credit card company, which may chase you for payments, a life insurance company will place the burden of responsibility on you. After all, a creditor loses money when you don’t pay, whereas a life insurance company comes out on top.

This often happens when individuals take out substantial life insurance policies at a young age, only to suffer drastically changing circumstances. Imagine, for instance, that you’re 20-years-old and you buy a house with your spouse-to-be, with a view to settling down and starting a family. You assume that you’ll need it for a long time, so you take out a 30-year-term.

But 10 years down the line, your spouse leaves you, the family you wanted didn’t happen, and you’re all alone with no dependents, and with growing debts, bills, and obligations. At that point, life insurance becomes a burden, so you may stop making payments, thus allowing the insurance company to profit from 10 years of insurance premiums.

Summary: It’s Not That Cut-Throat

You don’t have to look far to find consumers who feel they have been wronged by life insurance companies, consumers who will expend a great deal of time and effort into calling out these companies for their perceived wrongdoings. But they often exaggerate the situation due to their extreme anger and this creates unrealistic anxieties and expectations.

The truth is, while there are people who have been genuinely wronged, they are in the extreme minority. The vast majority of family members who were refused a death benefit were let down by the policyholder and by the lies they told on their policy.

Policyholders lie about their weight, smoking status, and medical conditions, and when caught up in this lie, they often claim they made an honest mistake. But the truth is, most life insurance companies will overlook simple mistakes and only really care when it’s obvious that the policyholder lied. 

And let’s be honest, it doesn’t matter how forgetful you are, you’re not going to forget that you’re a chain smoker, alcoholic, drug user, extreme sports fan or that you recently had a medical crisis!

If the policy was filed honestly, you shouldn’t have an issue when you collect, even if it’s still in the contestability period. As discussed above, life insurance companies stack the dice in their favor. They use statistics and probability to carefully set the premiums and benefits, and they rely on policyholders forgetting to pay and outliving the term. They don’t need to “rob” you in order to make a profit. So, be honest when applying and you won’t have anything to fear.

What Causes of Death are not Covered by Life Insurance? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

What is Accidental Death Insurance, and do you Need it?

Accidental death insurance, also known as accidental death and dismemberment insurance, is a type of limited life insurance often acquired for a nominal fee or added to an existing policy. As the name suggests, it releases a benefit if the policyholder dies from an accident or suffers a dismemberment.

Accidents kill an estimated 160,000 Americans a year and are far more common amongst men aged between 18 and 44. Many of these deaths occur as a result of falls and motor traffic accidents, both of which are covered by most accidental death insurance policies.

When You Don’t Need Accidental Death Insurance

If you already have life insurance, you can probably overlook accidental death insurance. In such cases, it will simply increase the value of the payout when you die, known as “double indemnity” coverage.

Unlike whole-life insurance policies, it does not provide policyholders with a separate investment vehicle that they can cash out at a later date. Generally, accidental death insurance doesn’t offer anything that a traditional life insurance policy can’t provide, and it may therefore be deemed an unnecessary expense.

However, there are exceptions.

When You Need Accidental Death Insurance

An accidental death benefit can’t provide you with anything that you won’t get from a traditional life insurance policy. However, it’s a different story with dismemberment insurance. This will cover you in the event that you lose a finger, toe or arm, which means you’ll have the money you need for medical costs and may be compensated for lost work.

Accidental death insurance can also help to cover any additional medical fees that result from necessary treatment taken after an accident and before death. Your family may be forced to cover these bills, and an additional death benefit can help them with that. 

Accidental death and dismemberment insurance is not something we would recommend in lieu of traditional life insurance, but if you have the option to add it to an existing policy for a few bucks a month, it’s well worth considering.

How Much Does Accidental Death Insurance Cost?

The price of your accidental death insurance premiums will depend on your payout as well as your risk factor. The average person can expect a charge of roughly $5 per month for every $50,000 of coverage, which means a benefit of $100,000 could cost as little as $10 a month.

But, as we have discussed many times before, underwriters focus on probabilities.The more likely you are to die from an accident, the higher those premiums will cost. For instance, if you’re an 18-year-old who has just started driving and enjoys a few high-risk hobbies, you may see those premiums climb.

How Long Does Accidental Death Insurance Last?

Accidental death insurance policies typically run for up to 40 years. You choose the desired term at the start and this is used to calculate your premiums, with longer terms leading to higher prices on account of the increased risk.

What is Not Covered by Accidental Death Insurance?

Accidental death insurance generally doesn’t cover all accidents and all dismemberments. The exact coverage will depend on the policy, and it’s possible to tailor your policy to include some of the things not traditionally included, but this may increase the premiums.

Suicide

Suicide is a tricky one. Many life insurance policies will payout if the policyholder commits suicide, but only if it occurs after the first two years and it is proved that they committed suicide so their loved ones would benefit (although this is not easy to prove).

However, accidental death insurance policies tend to rule suicide out altogether. Many deaths caused by misadventure may be queried as suicide, such as falls and drownings, but unless there is actual proof that they intended to take their life, the death will often be ruled as misadventure, in which case an accidental death insurance policy may payout.

War Injuries

Accidental death insurance rarely pays out for deaths resulting from war injuries. This is true whether the policyholder is shot or dies from an explosion or fall. That death was certainly not intentional, so you could argue that the policy should pay, but most insurers will refuse.

Illness and Disease

An accidental death insurance policy is not designed to payout in the event that you die from an illness or disease. Your beneficiaries may also face some resistance if you had a serious illness or disease at the time of your death but an accident was ultimately the thing that killed you.

For instance, if you have a serious mobility problem and this causes you to fall, hit your head, and die, then technically an accident killed you, but that accident wouldn’t have happened if not for the illness, creating some technicalities that will no doubt lead to problems when filing a claim.

Drugs or Alcohol

An accidental overdose is rarely covered by accidental death insurance. There will be no benefit for your loved ones if it leads to your demise, and no benefit for you if it leads to long-term health complications.

This is not true for all policies, however, and there may be exceptions for drugs that were prescribed.

How Can the Cause of Death be Proved?

As alluded to already, the cause of death isn’t straightforward. With a traditional life insurance policy, if the policyholder dies outside of the contestability period, the insurers will rarely get involved. That changes if they have suspicions about the death and believe that a crime was committed (fraud, murder) but it’s rare.

With accidental death insurance, however, there are many more nuances. As a result, an official investigation may be ordered, and this can include an autopsy.

How Does the Dismemberment Payout Work?

If the policyholder losses an appendage as a result of an accident, they may receive a partial benefit paid direct to them. The policy will dictate how much is paid and why, but generally the payout will be made following a non-excluded accident that results in the loss of:

  • An arm
  • A leg
  • A finger
  • A toe
  • Sight

Higher payouts may also be provided if the policyholder suffers complete paralysis.

What is Accidental Death Insurance, and do you Need it? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

How to Find Affordable Life Insurance

Life insurance can be expensive and if it’s essential those high costs can leave a nasty taste in your mouth. You may wonder if it’s worth purchasing a policy at all, which could place your family in jeopardy as they won’t have the cover they need when you pass. 

However, there are a few ways you can bring those costs down and get affordable life insurance. So, don’t despair, and take a look at these top tips for cheap life insurance.

How are Life Insurance Payouts and Premiums Judged?

Insurance underwriters set your premiums and your payout based on the likelihood that you will die during the term. It sounds pretty morbid, but these are for-profit companies we’re talking about and when death is your only liability, there’s no time for gentility. 

It’s something that frustrates everyone who has ever been quoted high premiums, but it’s important to see things from the perspective of the underwriter. If you’re 100 pounds over your ideal weight, your risk of heart disease, cancer, and countless other diseases increases, and you become more of a liability. 

It doesn’t matter how much you convince them that you’re on a diet and will lose all of that weight eventually—as things stand right now, you’re more of a liability than someone who weighs 100 pounds less.

Of course, it’s possible to be 140 pounds and unhealthy, just as it’s possible to be 240 pounds and healthy, and this is an argument that many applicants make. But those are the exceptions. The oldest woman ever smoked until the day she died and made it halfway through her 122nd year, and everyone knows of at least one smoker that continued the habit well into their 70th and 80th year, seemingly unaffected. 

However, the average smoker will die 10 years before their non-smoking counterpart and their risk of contracting a host of diseases increases exponentially for every decade that they stick with the habit. Should a life insurance company dismiss your habit just because of a 122-year-old French woman? Of course not. 

These are statistics and probabilities; they focus on the most likely and the most common. By their very nature, there will always be exceptions and outliers. A life insurance company doesn’t care about any of these because as long as they focus on the events that are most likely (obese policyholders and smokers will die young; preexisting medical conditions are more likely to reoccur than if they didn’t exist at all) the premiums will exceed the payouts and they will turn a profit. 

Start Early

The sooner you apply for life insurance, the better your chances of getting a high payout and a low premium. Age is one of the biggest factors in determining your mortality risk. A 20-year-old has a high chance of surviving a 30-year-term, but for every additional year, those odds decline and by the time they hit 55, the odds are no longer in their favor.

Starting early doesn’t just protect your loved ones if you die before your time, it also gives you more options. This is when whole life insurance policies are at their most beneficial. These will payout regardless, even if you live to be 100. The life insurance company will still benefit, however, because many of these policies either lapse because of non-payment (a lot can happen in those 80 years) or the policyholder takes the cash value.

They’re like a life insurance policy and saving account bundled into one, but they become less viable as you age.

Make Big Changes

You probably knew this tip was going to be here, but it’s worth mentioning: If you smoke, stop; if you’re obese, lose weight. We can’t stress enough how much of a difference these things will make to your life insurance application.

If you’re a smoker and you’re obese, you’re a massive liability. Statistically speaking, you’ll be beating the odds if you make it to your 60th year, which means a 30-year term stops being a viable option when you’re just 31! If that’s not enough to scare you, then there’s nothing we can say that will.

By quitting cigarettes and dropping a few dozen pounds, you improve your chances of living a long and full life, which, in turn, means you’ll get cheaper life insurance premiums.

And these are not the only changes you should consider making. Many applicants fail to calculate just how much of a liability they become when they partake in extreme sports and activities such as base jumping, parkour, sky diving, and rock climbing. Some of these are riskier than others, but in all cases, the underwriter will compare them to the averages to determine your likelihood of dying young.

Roughly 10 skydivers will die for every 1 million that jump on a regular basis. However, more than 40 times as many will die from base jumping and you’re 30 times more likely to die from extreme mountaineering than you are from base jumping. 

Some of these are less risky than you might think. For instance, you’re twice as likely to die from walking than you are from horseback riding, as the former puts you at risk of major pedestrian accidents. 

You’re also more likely to die from getting out of bed aged 45 than you are from SCUBA diving. So, assess the risks, try to look at your situation from the underwriter’s perspective, and make changes where necessary without giving up all the things that you enjoy.

Wait

You can apply for life insurance as soon as you lose weight or give up risky and dangerous activities. You can reap the benefits straight away when you do this, but the same can’t be said for everything. 

Smoking is a great example of this. If you quit smoking today, you will need to wait at least 12 months before that has an impact on your life insurance policy. It only makes sense when you consider the majority of short-term cessations will result in relapse

The underwriter also wants to protect their bottom line, because you won’t start feeling the health benefits until several months have passed and before that time elapses, you’re still a high risk for many diseases and conditions.

Look for Group Life Insurance 

If you can’t get life insurance by applying directly, you may be offered it through an employer. Group life insurance is offered to large groups of people and is typically provided by employers.

You probably won’t get the same extensive cover, but you will get some cover, and this is a great alternative if you’re struggling to seal the deal yourself.

Only Buy What You Need

It’s tempting to get a big payout when you’re buying life insurance as that payout can then provide a good life for your loved ones. But life insurance shouldn’t be like winning the lottery. It’s not designed to allow them to quit work and spend the rest of their lives sipping champagne on Mediterranean cruises.

The payout should cover all of their needs for several years, while also repaying any debts that you (or your loved ones) have. If you have a mortgage, it can also go towards repaying this.

Many life insurance experts recommend that you stick with the absolute basics in situations where the remaining family members can still support themselves. For instance, let’s suppose that you’re a 50-year man in relatively good health. You earn roughly the same money as your wife, but she’s 10 years younger than you and you also have a son at college and a mortgage with $50,000 left to pay.

In this case, the payout should be at least $50,000, plus the size of remaining debts. However, you don’t need to include all debts in this. Some debts, including all federal student loans, will die with you, which means your son or your wife won’t be burdened with them. For example, if you cosigned on a ,000 federal student loan and also have ,000 in joint credit card debt, a death benefit of ,000 will be enough.

That way, your wife can clear the mortgage and debt in full, thus reducing monthly liabilities and putting more money in her pocket at the end of the money. If she ever faces a financial crisis, such as the loss of a job, she’ll have a fully paid house to use as collateral and can take loans and equity loans as needed.

This is the best way to provide for your family after your death without crippling your finances in the present.

And Finally, Take Your Time

The sooner you apply, the better. But that applies to years and not weeks, so don’t feel like you need to rush. If you’re not sure about the process and need a little advice, spend some more time reading through articles and guides and speaking with current policyholders.

Providing yourself with a little extra shopping time will also make it easier to compare and to find the best life insurance rates and the best payouts based on your specific budget and situation.

How to Find Affordable Life Insurance is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

What is Permanent Life Insurance and How Much do you Need?

Permanent life insurance is defined as a whole-life policy, one that doesn’t expire and may provide a number of benefits during the policyholder’s life and when they pass away. It’s not a specific type of insurance, as such, and is instead an umbrella term used to describe life insurance policies that are not fixed to specific terms.

Types of Permanent Life Insurance Policies

There are two types of permanent policies: Whole Life Insurance and Universal Life Insurance. Unlike term life insurance, which is fixed to a specific term, permanent insurance policies are designed to be paid for the entirety of the policyholder’s life, with a death benefit released upon their death.

Take a look at these pros and cons to see how a permanent life policy can benefit you.

Pro: Lifelong Coverage

Permanent life insurance is not limited to a fixed period of time and providing you keep meeting those monthly premiums, the death benefit will be released to your heirs when you die.

Pros: Cash Value

Permanent life insurance is often likened to a savings account and a life insurance policy combined, as it has a cash value that you can collect as you see fit. You can see the policy’s cash value during the term and withdraw as much money as you need.

What’s more, the cash value grows on a tax-deferred basis, which means the policyholder is not required to pay taxes on the money it generates.

Pro: Premium Payments Don’t Change

With whole and universal life policies, your premium payments remain the same, which means you don’t need to worry about variable life insurance rates changing from one year to the next. You should pay the same in the first year as you pay in the 20th year.

Con: It’s More Expensive

The extended coverage and extra investment options come at a greatly inflated price, as whole-life policies tend to be much more expensive than their term-life counterparts. How much you pay will depend on the amount of coverage provided, but it’s generally a lot higher than a term life policy with the same payout.

Con: It Doesn’t Account for Inflation

A lot can happen in 50 years and a death benefit that seems like a huge sum now may be worth much less in 40 or 50 years when you eventually pass away. However, it’s worth noting that your life insurance premiums will remain the same as well, so it’s all relative.

Cons: It’s Complicated

Term-life insurance is relatively simple. You pay a sum of money every month and if you die within the term, your loved ones will be given a cash sum. However, once you consider the cash value, tax-free withdrawals, potential dividends, and more, permanent insurance policies are more complicated.

Other Types of Life Insurance

There are several types of life insurance and if you’re being rejected for permanent life insurance or receive quotes that are far too high, it’s worth looking into one of these other options.

Term Life Insurance

With a term life insurance policy, you won’t be covered for your entire life, but you will receive extensive coverage for a number of years. These policies are available for less, because if the policyholder outlives the term they won’t collect the death benefit or any other payments and the life insurance company will secure all the profits.

Final Expense Life Insurance

Seniors are generally refused for term and whole-life insurance policies because the risk is too high. However, final expense life insurance can provide many of the same benefits, with a death benefit paid to your loved ones when you die. The premiums tend to be high and the payout low, but if you’re above the age of 60 this is one of the few options you have for life insurance coverage.

Final expense insurance is often used to pay for funerals, estate taxes, and debt, but there are no restrictions regarding how it can be used.

Joint Life Insurance

Joint life insurance policies are targeted at spouses seeking to provide cover for each other and their children. The options include first-to-die insurance, where the money will go to the surviving spouse; and second-to-die insurance, which pays the death benefit to beneficiaries when both applicants die.

Is Permanent Life Insurance Right for you?

If you can get your head around permanent life insurance and understand what you’re paying and what benefits it’s providing, it could be the right choice. This is especially true if you have the money to meet those payment obligations every month and want the extra asset that the cash value can provide.

However, if your insurance needs revolve entirely around protecting your loved ones, term-life insurance is probably the better option. A term life insurance policy generally offers a high payout for low premiums (when compared to whole life policies). This sum can be used to clear debt, pay off the mortgage, and set your loved ones up for life. And just as importantly, it provides you with the peace of mind that comes from knowing your nearest and dearest won’t be destitute if you die.

Older applicants may struggle to get affordable term and whole life insurance products, but that’s where final expense insurance comes in. This is a limited type of policy with a coverage amount of less than $50,000, and an average amount of less than half that—more than enough to cover funeral expenses and most types of debt.

Summary: There are Always Options Available

You’re never too young, old or sick to be considered for life insurance. 

It’s all about probabilities. Underwriters will consider all the data you provide them with and use this to calculate the likely date of your death. It sounds morbid, but when your business is death, things can get a little dark every now and then.

Imagine, for instance, that you’re a 20-year-old male with a clean bill of health and a brand-new family to look after. A life insurance company will be more than happy to provide you with term life insurance, because these products are limited to 30-years and the odds are high that you will live to be 50. Not only will they be more than happy to sign you up, but they will also offer you a good price because you’re deemed to be such a low risk.

If you opt for a permanent life insurance policy, the premiums will be higher because the death benefit payout is more likely. However, they also know there’s a good chance you will face financial difficulties during the next few decades, in which case you may stop making those payments or accept the cash value as soon as it reaches a respectable sum.

As you age, your risk increases, and the same applies for smokers and people with pre-existing medical conditions. They will still be more than happy to receive your business, it just means your options may be a little more limited and your premiums may be much higher.

So, keep searching, keep comparing, and work on improving your health to bring those premiums down.

What is Permanent Life Insurance and How Much do you Need? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

How do Life Insurance Companies Make Money?

Life insurance seems like a pretty good deal. You pay $30 a month for 20 or 30 years and in the event of your death, your family gets a sizeable cash sum, often in excess of $250,000. Every 12 seconds someone dies in the United States and these deaths occur across all demographics (although the majority are over 70) and from a myriad of causes.

If a life insurance company can afford to pay a $500,000 sum on a policy that’s collected less than $20,000, how can it afford to stay in business when life is so fragile, death is always a certainty, and they’re in it for the profit?

Contrary to what you might think, insurance companies don’t rely entirely on luck or underhanded tactics to stay in the black. There are actually three ways that an insurance company makes money and ensures those profits remain stable.

Underwriting

Underwriting is the process of taking a calculated financial risk in exchange for a fee. The word was coined as the underwriter, the “risk-taker”, would sign their name underneath a detailed outline of all risks they were willing to take.

Underwriting is performed by all life insurance companies and it’s a careful, considered process through which they can balance their profit and loss. There is no guarantee with the underwriting process and it’s not uncommon for them to lose money over the course of a financial year. However, what they lose one year may be offset by what they earn in another year.

How Insurance Companies Profit from Underwriting

Insurance is based on statistical analysis and probability. If you’re a healthy 20-year old with no preexisting medical conditions and no genetic issues, you’re considered to be very low risk. 

An insurance company may offer you a $500,000 payout on a 30-year term in exchange for a policy that costs less than $1,000 a year. They’re only making $30,000 over the term, but they know there’s a good chance you’ll live well beyond your 50th year, which means all of that $30,000 is profit.

In fact, statistically speaking, a 20-year old has a less than 6% chance of dying within 30 years and this applies to the general population. Once you account for medical issues, family health problems, smoking, drug use, dangerous jobs, and a plethora of other high-risk conditions, that figure drops to an infinitesimal sum.

The insurance company knows that if they have 50 healthy 20-year-olds on 30-year $500,000 policies, there’s a good chance that between 0 and 2 will collect. This means they will collect $1.5 million and payout between $0 and $1 million. 

The odds of a 20-year-old dying within that term increase if they have abused drugs/alcohol in the past, have a preexisting medical condition or their parents died of genetic disorders before they turned 50. In such cases, the underwriters will calculate the risks and create a policy that allows them to cover their costs.

By the same token, a life insurance company may refuse to provide a 30-year term to a 52-year-old, because according to the statistics, one out of every two will die within that term and they simply couldn’t offer realistic premiums.

Of course, these are just rough estimates, but it gives you a general idea of how life insurance companies operate. It’s also the reason why your premiums increase significantly if you are a smoker (smokers live 10 years less on average) are obese (obesity is considered to be as much of a mortality risk as smoking) or have a problematic medical history.

Canceled and Lapsed Coverage

Your life insurance policy can stop or be canceled at any time. Let’s return to the example of the 20-year-old paying premiums worth $1,000 a year. They may have taken out the life insurance policy because they just got married or they experienced a bout of paranoia after learning about a friend who died young.

But what happens when that relationship ends and that paranoia fades away; what happens if they go from being comfortably employed, to unemployed and desperate? They’re not the ones who will benefit from that payout, so they may decide that they’re just wasting their money, in which case they stop making the payments and the policy lapses. If this happens, the life insurance company gets all of the premiums and none of the liability.

Whole life insurance policies can also be cashed out. They build money through dividends and this entices the owner to give it all up for a big payday. If they’re struggling financially and realize they have a big balance waiting for them on their life insurance policy, they may be tempted to cash the check, close the account, and walk away with the windfall, thus removing all liability from the insurance company.

Refusing to Pay Out

Life insurance companies can also make money by refusing to pay out and pointing to a discrepancy. This is not part of their business strategy, and they don’t actively seek to scam their customers because, quite simply, they don’t need to. Thanks to underwriting, cash outs, lapse policies and investing, life insurance is a profitable enterprise without needing to resort to underhanded tactics.

However, they can and will refuse payouts if they determine that the contract was somehow breached. This can happen in any number of ways and for a myriad of reasons:

The Cause of Death Wasn’t Covered

Most causes of death are covered by most life insurance policies. However, there are some exceptions, including suicide. Many policies refuse to cover suicide at all, while others refuse to cover it if it occurs within the first 2 years of the policy.

More than 40,000 people take their own lives every year in the United States and it’s a common issue across all demographics. It’s also on the increase and is now the 10th biggest killer in the United States. 

As heartless as it might seem for an insurance company to refuse a payout for someone who took their own life, it’s important to remember that their underwriting is based purely on probability, and because suicide is one of the biggest killers in young men, it’s something that has to be considered.

The policy should state clearly which causes of death are covered and which ones are not. It’s also something you can discuss with the insurance company when you take out your policy.

Important Information was Not Disclosed

This is the most common reason for a payout to be refused. In some cases, the applicant is looking for cheaper premiums and knows that a few seemingly innocent lies will shave tens of dollars off their premiums. 

The policyholder may also assume that certain information isn’t relevant or be too ashamed to disclose it. For instance, if they were cautioned for driving under the influence of drugs or alcohol it may not seem relevant to the underwriting process, but if they die in a road traffic accident it could prevent a payout.

In the majority of cases, however, they simply forget. A life insurance policy is something you fill out in one sitting and something that requires you to list all previous medical conditions, hospital visits, and health complaints. It’s easy to forget a few things here and there.

There is No Beneficiary

A life insurance policy can only be paid directly to an heir when they are named as a beneficiary. If there is no beneficiary, it will be paid to the policyholder’s estate, from which their heirs can make their claim.

This becomes problematic if the policyholder has a lot of debt, as the debtors will then line up to take their share from the estate. It can also make life difficult for loved ones trying to make a claim on that estate. It’s always recommended, therefore, to name beneficiaries on the life insurance policy and to back this up by writing a will.

The Contestability Period

The above issues become more prevalent during something known as the contestability period. This begins as soon as the policy goes into effect and it can last for 1 or 2 years, depending on the policyholder’s state of residence.

If the policyholder dies during this period, the life insurance company will seek to contest it by looking at all of the details and ensuring they match. They will check the cause of death against previously filed medical reports and will make sure the correct information was supplied at the time the policy was filed and that there are no discrepancies.

Once this period passes, it’s unlikely there will be any issues, but they can still occur. The insurance company may, for instance, investigate the claim if they believe it was purchased for the sole benefit of the beneficiaries (for example, the policyholder purchases it knowing they were going to commit suicide or were about to die).

Summary: Payouts are Rare

Studies suggest that as few as 2% of all term policies pay out, and the most common reason for non-payment is that the policyholder survives the term. This is a statistic that detractors like to quote and it’s often followed by a claim that life insurance is just institutionalized gambling. 

To an extent, they’re right. You’re essentially gambling against a house that always wins and, like a casino, it always wins because, for every player that wins, 10 others will lose. The difference is that life insurance provides some much-needed peace of mind while you’re alive and ensures your loved ones are covered in the event that anything happens to you.

How do Life Insurance Companies Make Money? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

What Is Nursing Care

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bed rest care in the nursing interventions classification, a nursing intervention defined as promotion of comfort and safety and prevention of complications for a patient unable to …

But one friend of a resident at the care home said she was "disgusted" at the CQC report, adding that the home was clean, tidy, and that every member of staff had been "wonderful and caring". Ashleigh …

Five years on, her work has been recognised with a major award in nursing care. “I didn’t have work in Portugal at all, or even a job. I just work every single day with my heart and passion, I love my …

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Care chiefs have upheld a complaint against a north-east nursery after a child fell down a set of metal stairs. claire harrison withdrew her two-year-old son Isaac from Les Enfants Nursery in …

Whether we label nursing care as basic, fundamental or essential is not important. What we must accept is that this care matters just as much as the technological and curative elements of healthcare. We need to move beyond a critique of how the relational and social aspects of care are overshadowed by the technical, and so move beyond patient-centred care to focus on an authentically …

‘It is nursing we are nursing, but I think we’re still seen as domestic workers”. In a care workforce, unpaid overtime can be a ‘badge of honour’ worn proudly by some of the workforce, says Dr Hayes. …

Nurse Practitioner Vs Nurse nurse practitioners (nps) and nurse anesthetists are similar in that they are both advanced-practice nurses. However, they do differ in terms of education, job duties/roles, and salary. Salary Range For Nurses A registered nurse (rn) with mid-career experience which includes employees with 5 to 10 years of experience can expect to earn an average total

Nursing Care In terms of care home funding, tasks identified by a nursing needs assessment as those that need to carried out or supervised by a qualified nurse – …

Skilled Nursing Homes

Nursing homes, also known as old people’s homes, care homes, rest homes, and convalescent homes, provide residential care for elderly or disabled people that often includes around-the-clock nursing care. Often these terms have slightly different meanings in the same or different English-speaking countries to indicate that the institutions are …

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According to the CDC, around 1.7 million people reside in one of the 15,000 nursing homes around the country in a given year. These long-term care facilities provide different services, however, based on the amount of time and care required for each of their residents.

Medicare Part A covers a wide range of care, including hospital stays, skilled home health care, lab tests, hospice, and skilled nursing and rehabilitation centers. Each one has different coverages …

At skilled nursing homes, residents receive a high level of care and medical attention from qualified, certified medical practitioners. Doctors and nurses are available to prescribe and administer medication, assist with various forms of therapy, and provide 24-hour medical supervision.

The government collected more than $50 million in judgements from skilled nursing facilities in 2018 … an OIG report said addressing “substandard nursing home care” is one of the top performance …

Patient advocates really, really want to believe that people discharged from a hospital are better off getting additional medical care and rehab at home than in a skilled nursing facility (SNF). But …

Quality Measures for Skilled Nursing Facilities Gone are the nursing homes and retirement communities lists. In their places are skilled nursing and independent living, with assisted living being held over from 2018. Following is more information …

Skilled care is nursing and therapy care that can only be safely and effectively performed by, or under the supervision of, professionals or technical personnel. It’s health care given when you need skilled nursing or skilled therapy to treat, manage, and observe your condition, and evaluate your care.

What Is The Best Stethoscope To Buy ‘You have been the best cat I could ever have wished for.’ Everything was about Susie. Couldn’t buy a flat as she’d not be able … s tiny face as he gave her the injection, then placed a stethoscope … The Best Stethoscopes for Doctors Reviewed. The Stethoscope is the most important diagnostic tool for
Nurse Practitioner Vs Nurse Nurse Practitioners (NPs) and nurse anesthetists are similar in that they are both advanced-practice nurses. However, they do differ in terms of education, job duties/roles, and salary. salary range For Nurses A registered nurse (rn) with mid-career experience which includes employees with 5 to 10 years of experience can expect to earn an average total

How do I find nursing homes near me? Use our skilled nursing facility locator. find 15,000+ nursing facilities and their costs, requirements, compare nursing homes and more.

What Is The Best Stethoscope To Buy

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‘You have been the best cat I could ever have wished for.’ Everything was about Susie. Couldn’t buy a flat as she’d not be able … s tiny face as he gave her the injection, then placed a stethoscope …

The Best Stethoscopes for Doctors Reviewed. The Stethoscope is the most important diagnostic tool for doctors. It’s used in every patient encounter and is key to formulating the initial differential diagnosis and following investigations.

Stethoscope prices. $100 to $250+ specialist stethoscopes are the best available and make no sacrifices in terms of quality, performance, or price. Dr. Schreiber cautions that although a budget stethoscope might be “good,” a medical professional with a focus on accuracy probably wouldn’t want to use one.

To help you choose the best stethoscope for you, take a look at the following types of stethoscopes: 1. By Head Type. single head stethoscope; single head stethoscopes are known for clear and wide frequency sound output.

Mr Morrison, a nursing lecturer at GCU who is also involved in the Men in nursing universities research group reporting to the Scottish Government on how best to increase numbers … “If you try to …

Welch-Allyn. The Welch-Allyn brand is highly-trusted amongst medical professionals and best known for their Otoscopes, Ophthalmoscopes, and medical monitoring devices. Welch-Allyn is a lesser-used stethoscope brand, but due to it’s general status as a quality medical devices brand, it continues to have a following amongst doctors.

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Our choice for a Budget Buy stethoscope is the 3M Littman Lightweight II SE, the less expensive cousin to the Classic III. It features a tunable diaphraghm with dual-sided chestpiece, with non-chill rims so as to be comfortable on the patient’s chest.

Nurse Practitioner Vs Nurse Nurse Practitioners (NPs) and nurse anesthetists are similar in that they are both advanced-practice nurses. However, they do differ in terms of education, job duties/roles, and salary. Salary Range For Nurses A registered nurse (rn) with mid-career experience which includes employees with 5 to 10 years of experience can expect to earn an average total

To help you choose the best stethoscope for you, take a look at the following types of stethoscopes: 1. By Head Type. Single head stethoscope; single head stethoscopes are known for clear and wide frequency sound output.

Nurse Practitioner Vs Nurse

Nurse Practitioners (NPs) and nurse anesthetists are similar in that they are both advanced-practice nurses. However, they do differ in terms of education, job duties/roles, and salary.

Salary Range For Nurses A registered nurse (rn) with mid-career experience which includes employees with 5 to 10 years of experience can expect to earn an average total compensation of ₤27,000 based on 282 salaries. An … Cost Of skilled nursing facilities patient advocates really, really want to believe that people discharged from a hospital are better off getting

06/12/2017  · Nurse practitioners and nurses are both healthcare workers specializing in patient care, rehabilitation, and the education of patients and their families.

Both nurse practitioners (NPs) and registered nurses (rns) work closely with patients to monitor their health and provide care for acute and chronic illnesses.

Read the full complaint here: U.S. vs. Michael Avenatti] Donald Trump Jr. gloated over … but one proposed bill could help bring more experienced nurse practitioners to those facing a healthcare …

We recognised that there are two sides to every situation/story — the patient’s vs the practitioner’s … What is common is that it’s assumed I’m a nurse even after multiple introductions and …

Nurse Practitioners (NPs) and Registered Nurses (RNs) have different roles in patient care. RNs typically work in patient-facing roles carrying out procedures, treatments, and medications ordered by a provider (such as a physician, physician assistant, or nurse practitioner) while NPs examine, diagnose, and prescribe those things.

Caring Nurses Services A Caring Heart Nursing Services is a Medicare accredited, CHAP certified homecare company that was formed by a group of caring and professional nurses. Different Types Of Baby Nurses There are many different types of nurses and many ways to categorize the various nursing roles. If you are thinking of becoming a nurse, it may

The main difference between a Registered Nurse and a Nurse Practitioner is the qualification. A Registered Nurse is someone who has graduated from a nursing program and met the criteria for registration according to the country they work in.

PA vs NP? Which are more respected? Which would I hire? She is now a pediatric nurse practitioner at the Pediatric Group in Troy … afraid of natural phenomena — such as thunder and the dark — than were the boys (30 vs. 23 percent.) Boys also reported …

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Mr. McAlister chooses to ignore the Supreme Court decision Doe vs. Bolton, which allows the factors of the … The law also allows non-physicians to perform abortions such as nurse practitioners, …

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