Life insurance comes with a legal contract between parties. The first party, also referred to as the insurance policy holder or owner, provides payment to the second party or the insurance company. Payment can have two options: either the insurance policy holder pays on a regular basis such as once a month for five years or through bulk payments. This is done for a beneficiary. The beneficiary will claim the payment made by the first party when the latter is in a particular situation.
In addition, the beneficiary does not act as the third party in the contract. In some cases, when the beneficiary has already been identified, it cannot be changed. However, there are insurance companies that permit the changing of a beneficiary provided that this change is permitted by the original or previous beneficiary.
The goal of investment insurance is to provide assistance to increase the capital of the insurance policy holder. This is done by paying a regular premium or as bulk payment. In the United States, it comes in different names such as variable best life insurance policy and whole life insurance. This type of insurance cannot be withdrawn or cancelled by the policy insurance holder whatever the reason may be. However, one exemption for cancellation is when the insurance company have evidenced that the application has used false information and falsified documents.
On the other hand, the policy insurance holder should understand the whole content of the contract provided by the insurance company. This is because there are limitations in terms of the benefits that will be received by the beneficiary and the circumstances. For example, if the suicide is the cause of death of the policy insurance owner then the contract is considered as null and void. Therefore, the beneficiary is left with no benefits. Another example to make the life insurance null and void is if the beneficiary has contributed to the death of the policy insurance holder in order to claim the benefits.
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