INSURANCE

So the idea of spending a few hours assessing your financial security needs and then finding the right insurance product isn't your idea of fun? Don't worry, you're perfectly normal! It's true, it's not very exciting.

But, nevertheless, it's a vital step to ensure financial security for you and your loved ones. So is making the time to do it properly. This means taking a few minutes to read your insurance policy and, if need be, to ask your life and health insurance advisor for clarifications. You wouldn't jump out of a plane without first checking that your parachute was working properly, right?

At first glance, all insurance policies seem alike, but they're not.

Financial security needs vary from one person to the next, in the same way that budgets do. Therefore, insurance companies have a range of products to offer for the same type of coverage. Each policy defines the coverages it provides and detailed terms and conditions.

"DISABILITY", "ACCIDENT": SEVERAL DEFINITIONS

For example, insurance policies include explicit definitions of the terms "disability" or "accident."

Thus, in some policies, insureds are recognized as being disabled (and eligible for benefits) if, as a result of an illness or injury, they are unable to perform the tasks of their usual occupation.

In other policies, insureds must be unable to perform the tasks of their occupation or any other job for which they are qualified. Some policies even combine these two definitions.

HOW WILL BENEFITS BE PAID?

The policy also describes the terms and conditions for the payment of insurance benefits. Benefit payments may be made in several ways, such as in a lump sum, as income replacement or to reimburse various expenses.

Under certain terms and conditions, benefits may be subject to a coordination provision. In this case, a disabled insured receiving workers compensation benefits as a result of a work-related accident, for example, cannot also receive disability benefits under a group insurance plan.

RESTRICTIONS, EXCLUSIONS

All insurance policies have restrictions, exclusions or provisions that limit the scope of the coverage. Insurers use these limitations to define the situations that they are prepared to insure and to set an affordable rate. Some of these restrictions are run-of-the-mill, such as those pertaining to suicide. Others are becoming more common, such as exclusions for extreme sports.

Moreover, policies generally include a provision for pre-existing illnesses. "Pre-existing illnesses" refer to health problems that the insured was suffering from prior to taking out an insurance policy. This means that in some circumstances an insurer may deny an insured's claim for benefits.

In short, each insurance policy is different. Take the time to read your policy thoroughly and ask questions. Unfortunately, due to lack of interest or time, many people don't read their policy until the time comes to make a claim.