Why Its Important To Know All About Your Insurance Policy

Why It’s Important to​ Know All About Your Insurance Policy
It’s an​ accepted fact .​
There are things in​ life that we have no control over .​
Death is​ one .​
Unless we are planning a​ suicide,​ the​ where,​ when,​ what and how of​ our life’s end are things we simply have no prior knowledge of​ or​ power over .​
The same is​ true for accidents and illness .​
We don’t know when they will hit us .​
Of these three risks,​ however,​ death is​ more devastating as​ its effect on​ our family’s future is​ permanent.
Does this mean therefore that we are completely powerless to​ deal with this eventuality? Not really .​
Granted we have no idea when death will befall us,​ there is​ something we can do to​ soften its blow .​
We can plan .​
We can make sure that,​ if​ and when death happens,​ we are ready .​
This in​ essence is​ what life insurance is​ all about .​
It’s our positive response to​ a​ negative risk .​
For this response to​ be effective,​ however,​ we must be sure it​ is​ the​ right one .​
Simply put,​ our life insurance policy can only guarantee our beneficiary’s future as​ far as​ we allow it​ to​ .​
We need to​ make sure therefore that we purchase one that is​ well suited to​ our needs .​
More importantly,​ we need to​ understand the​ provisions of​ our policy.
This is​ the​ bitter lesson Barry Norman learned too late as​ illustrated in​ the​ case of​ Avco Financial Services Realty Ltd .​
V .​
Norman,​ a​ decision of​ the​ Ontario Court of​ Appeals .​
Barry Norman and his wife Yvonne secured a​ one-year second mortgage loan from Avco in​ 1988 and arranged for a​ life insurance coverage as​ an​ addendum .​
His belief was,​ should anything happen to​ him or​ his wife,​ the​ policy would serve as​ settlement .​
Things went smoothly at​ first .​
In 1989,​ the​ mortgage and insurance were renewed for another year but in​ 1990,​ Norman’s wife no longer qualified for the​ insurance .​
She had fallen ill with cancer and died the​ following year .​
When the​ mortgage went into default,​ Avco sued Barry Norman for payment of​ the​ loan .​
He counterclaimed for negligence,​ alleging Avco failed to​ inform him that the​ insurance expired with each one-year term of​ the​ mortgage and had to​ be renewed .​
The court ruled in​ favor of​ Avco .​
Barry Norman should have informed himself of​ the​ insurance details when he renewed it​ for another year .​
The lesson here is​ crystal clear .​
Don’t just purchase a​ life insurance policy .​
Talk to​ a​ licensed professional and make sure you​ get a​ policy based on​ what you​ want and that you​ understand all its provisions .​
If you​ are a​ mortgage borrower,​ don’t sign up for life insurance from your lender .​
This is​ not their main concern .​
If you​ worry about the​ mortgage,​ then get a​ higher coverage that will be able to​ cover both the​ mortgage and the​ needs of​ your family .​
Take charge of​ your insurance policy .​
This is​ one aspect of​ your life you​ need to​ have control over.

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