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Life Assurance Frequently Asked Questions

Can I take out a loan on my life assurance policy?

Life assurance policies usually accumulate cash values. You can take out a loan on your current cash value. You will still need to repay this loan (with applicable interests). Otherwise, it may affect how the build up of your cash values and any outstanding amount will be deducted from the proceeds of the life assurance policy upon your death.

Can I get coverage even if I’m already sick?

Yes, you usually can. It depends on the type and severity of sickness you have. The insurance company will evaluate the risk and may place you under a different premium rating class based on their assessment of the risk you present.  You may be required to provide additional medical proof/tests to help in the evaluation.

How can I make changes with regards to my beneficiaries?

If your beneficiaries are revocable beneficiaries, you can easily change the names of the beneficiaries by contacting the customer service department of the insurance company. However, if the beneficiaries are irrevocable, you will need their signature in order to make any changes, not just in the list of beneficiaries but in other areas of your policy as well.

Why are premiums different for me and my wife when we have the same level of coverage?

Premiums for life assurance policies are based on different factors which basically show the level of risk an individual presents. This means that the difference between you and your wife’s premiums can be accounted by the difference in your age, health condition, lifestyle, gender and occupation, among other factors.

I smoke but I plan to stop. Can I just say in the application that I have already stopped smoking?

It’s best not to misrepresent any facts on your application to avoid any problems when it is time for your beneficiaries to make a claim. If you still haven’t stopped smoking, it is best to say so. You will be charged with higher premiums but this is worth it than having your death benefit at risk because of misrepresentation of facts. What you can do is to stop smoking and then apply for a reconsideration of premiums after sufficient time has passed.

What can I expect when I’m applying for my life assurance policy?

You may be required to undergo medical examination (i.e. urine tests, blood tests, etc.) after you have submitted your application.  It really depends on the type of policy you get. There are non-medical issue policies (for small face amounts) that only require you to answer non-medical questions.

If I cancelled my policy midway, will I get anything?

For life assurance policies, any cash values at the time of cancelation/surrender, these will be paid out to you less any premiums or loans due. However, if you cancel your policy early, there may not be enough cash values to speak of.

What does it mean to “write a policy in trust”?

This is a legal document that ensures that the proceeds of the life assurance go directly to your beneficiaries and not to your estate. If the proceeds of the life assurance become part of your estate, it will be subject to substantial estate or inheritance taxes. If the proceeds go directly your beneficiaries, the death benefit is considered tax-free.

Writing the policy in trust also ensures that payouts are made more quickly since the proceeds are not tied up with the estate.

What happens if I survive the coverage period?

If you have an endowment policy, you will get the amount of the endowment (plus any dividends, interest earnings) at the time your policy matures. For other policies, you will receive the equivalent of the cash value.

Will my beneficiaries get more if I die from an accident?

If your coverage has an Accidental Death benefit, the insurance company may pay an additional amount on top of the sum insured if you die due to an accident. However, please note that there are exclusions to the coverage. For instance, death due to acts of war or riot or arising from criminal acts will not be considered payable under the accidental death benefit.

To protect your loved ones for less, fill the form on the right to get your life insurance quote.