How to read and understand your life insurance policy

The parts of a life insurance policy

A life insurance policy contains the following parts:

The cover page: This is who the insurance company is and the type of plan you've purchased, and it's signed by an insurance company officer.

The schedule of benefits and specifications page: On this page, you'll find descriptions of the benefits and details of your policy. These include things like:

• How much and how often you’ll pay.
• Who the insured person(s) are.
• The date the policy was issued.
• The policy number (this is especially important for filing a claim later).
• Other details about the policy.

Terminology: This section defines some of the jargon in the policy to help you better understand it. Make this section your friend.

Your rights: As the owner, there are certain rights you have with your policy, including:

• The right to transfer or assign the policy.
• The right to change or update beneficiaries.
• The right to receive the cash value and dividends (if applicable).
• The right to take out a loan against the cash value (again, if applicable).

Claims and settlements: This includes instructions on how to make a claim and information about the choices your beneficiary has regarding the death benefit.

Riders and endorsements: If you have a rider (extra benefits you’ve added to the base policy) or endorsements (adjustments or changes to the base policy), they’ll be attached to the policy along with a copy of your application.