an illustration of a phone and insurance document that have been approved
Shopping Around

Common policy items to check to make sure your beneficiaries get a payout

Shopping Around

Common policy items to check to make sure your beneficiaries get a payout

There are typical missteps that can stop an insurer from approving the death benefit.

[Trigger warning: mentions of suicide & self-harm]

Mistakes happen. I mean, remember skirts over jeans? Frosted tips? We all make blunders from time to time. It’s a natural part of life. The important thing is that we learn from our mistakes, so that we can do better in the future. And when it comes to life insurance, mistakes are always bound to happen so you’ve got to keep your eye out. Insurers want to limit mishaps as much as possible, and as policyholders, potential or otherwise, you should want the same. Here, we’re going to go over some common mistakes that people make when working with life insurance so that you can walk away with the right tools.

  1. Missing premium payments
  2. Misinformation on the policy
  3. Failing to update information
  4. What else can prevent a payout?
  5. Ways to prevent these mistakes
  6. Wysh Granters
  7. Conclusion

Missing premium payments

Who among us hasn’t missed a bill payment here or there or several times? Days turn to weeks, you miss a payment and then, poof, you’re logged out of your Hulu account. But insurers see your premium payments as integral parts of a contract. Not paying the premium is akin to not upholding your end of that contract. And while there are a number of reasons as to why you may miss a payment, such as job loss or other sudden financial burdens, keeping to that contract is still just as important as when you started.

Misinformation on the policy

Insurers ask questions when trying to figure out what kind of coverage you need and mistakenly putting in the wrong information can lead to a variety of consequences. Now, insurance companies use underwriters to confirm the information provided, because they want to ensure the validity of the application. When applying, you want to be honest, but more importantly, you want to be knowledgeable. Even something as misstating age or legal gender can permit some companies to adjust death benefits later on.

Failing to update information

Life insurance companies pay out death benefits to beneficiaries upon the death of the policyholder. But we live complicated lives—sometimes people are there for the long run while others are in your life for only a short amount of time. When a beneficiary changes, you have to update your insurer of this change. For whatever the reason is, when your life situation changes, it helps to be as open and honest as possible.

What else can prevent a payout?

Aside from making application errors, insurers have protections in place to avoid paying out fraudulent claims or claims that exceed the boundaries of the policy. Things such as actively lying on your application, dying from risky behavior such as extreme sports without policy protections, or even suicide within the first two years of your policy are all actions that can reduce or even prevent benefits from being paid out.

Ways to prevent these mistakes

Knowing what can happen is only half the battle. The other half is taking the necessary steps to ensure your application is rock solid.

  • Keep tabs on your premium payments: While this seems like super simple stuff, you can never be too obvious, in our opinion. One of the best ways to avoid making this mistake with your life insurance policy is to just stay up to date on your billing.
  • Be honest: Honesty really is the best policy. As mentioned before, insurers want to confirm the validity of your application. Some companies have periods of time, usually a couple of years, where they look at your policy with a heightened scrutiny. Which is why being as transparent as possible can only help you in the long run.
  • Communicate: Life is weird, right? And when weird things happen, there’s a vulnerability that we can feel. But communicating is an important part of any changing process so it’s important to talk with your family and beneficiaries about your policy, the expectations, and any questions they may have. If beneficiaries change, make sure you update your insurance beneficiaries as soon as possible. You only have things to gain when you communicate.

Wysh Granters

Okay, this one is super Wyshbox specific, but can you blame us? Our Wysh Granters, AKA our awesome customer support team, are available to help you with your Wyshbox policy needs. With personalized policies, you require personalized customer service. Wysh Granters are available to answer questions, offer in-app support and can even work with your loved ones to help grant your Wyshes. If there is a group of people you want to communicate with about your policy, it’s them.

Conclusion

Life insurance is about security for the future. Which is why it’s important to be as secure as you can now with your policy. You don’t want to risk your policy because of an error, intentional or otherwise. That’s the honest truth.

The opinions we expressed in this post are for general informational purposes only and are not intended to provide specific advice or recommendations.
Person resting on a cloud
Shopping Around

Should I get life insurance in my 20s?

My guide to adulting and financial protection.

illustration of a man sitting in a chair on the beach
Shopping Around

The importance of end-of-life planning

Unfortunately, you won’t be around forever. Here’s how to prep for the inevitable.

A girl and her dog in a car with sunglasses
Shopping Around

How to make sure your life insurance covers it all

Avoiding common gaps in life insurance coverage.