Life insurance helps protect families by replacing lost income if a wage earner dies. The death benefit is given to the beneficiaries as long as the policy is still in force, death occurs beyond the contestability period and no medical conditions have been concealed to get the cover. The beneficiaries could expect to receive a specified cover amount or an amount inclusive of the fruits of a policy’s savings or investment component.

A group life policy provides coverage to a group of people under one contract. These contracts are typically sold to businesses to cover their employees or associations to cover their members. Lending institutions buy policies to cover their debtor’s loans in the event of death. Anyone who ceases to be employed or be a member of an association can convert to an individual policy and keep the coverage. The insurance company may not apply a new contestable period if the group life policy has been in force for two years and the insurance amount can be the same or less than the original policy. A policy that is converted before the two-year contestability period ends can be treated as is until the contestable period reaches the time limit under the original group policy.

Credit life insurance pays off loans or charge account balances when the insured dies. Some lenders or sellers require credit life insurance as a pre-requisite for a loan approval. A person who has an existing life policy can require the creditor to accept an assignment of benefits under the existing policy instead of purchasing a credit life insurance.

A policy that has an accelerated death benefit provision may pay the death benefits under certain conditions, even when the insured is still alive. An insurance policy with this type of benefit can provide an early benefit payment based on the need for long term care services with the same benefit eligibility requirements as a long-term care policy. It can also be paid for a specified disease or a terminal illness. This benefit can be part of the policy or attached as a rider.

There are certain benefit eligibility requirements that have to be met to have a qualified long-term care illness. A person should be diagnosed as chronically ill and receive long-term care services through a plan of care prescribed by a licensed health care practitioner. A chronically ill person due to disability or age is expected to be unable to do at least two of six activities of Daily Living (ADLs) without substantial help from another person for at least 90 days. These activities are bathing, dressing, toileting, transferring (mobility), eating and continence.

Some policies provide an aggregate dismemberment benefit that may provide benefit for dismemberment of hand and feet or loss of eyesight. A written proof of disability or continuance thereof may be required by the insurance company. When the insured ceases to be totally disabled, fails to submit proof of continuance of total disability when required or fails to be examined medically when required, the insurance company may choose not to provide any further benefit.