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How Do Life Insurance Policies Work? Please Help!?

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How Do Life Insurance Policies Work? Please Help!?

Postby Elvin » Tue Oct 10, 2017 9:13 am

I'm doing some research for a school project i'm working on and i don't understand how life insurance works.Do life insurance policies consist of lets say a person dies and a few days later the family of the dead person is contacted and it then told how person X, before they died, left behind a large sum of money for their family and that money is so much the family can practically buy a new car with the money. Is that how life insurance works? I was reading online that life insurance policies only cover funeral cost and temporary mortgage payments, but does it cover other personal things like someone buying a new house? Is their an investigation into how the person died before money is realized? Is there another policy for what I'm talking about cause i don't think its called a life insurance policy.
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How Do Life Insurance Policies Work? Please Help!?

Postby Suthfeld » Wed Oct 11, 2017 8:04 am

That is not how they work.

The family is not contacted.
The person is supposed to tell the family before the person dies, or leave a note that they will find after the person dies.
The family has to contact the life insurance company.
Until they do, the life insurance company does not pay them any money.

When life insurance is purchased, the person who buys it decides how much to buy.
The person decides on the amount of money that the insurance will cover, not on the things that will be covered.
The family decides how to use the money.

There may be an investigation for other reasons, depending on how the person died, especially if it was murder, suicide, or accident.
An investigation is less likely if the person died of disease.
There is never an investigation only because the person had a large amount of life insurance.
An investigation only happens if there is another reason.
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