Life Insurance increase question

[sjshr]

What is the name of your state (only U.S. law)? California

I am 51 and have a term life insurance for $150,000

I am planning to increase it to $250,000 and have to take a medical examination.

My agent informed me that there is a "two year" wait period (?) for payout in case of unreported illness? I don't understand this because if the medical exam says h=me health is ok, why is there a wait period? Moreover, i didn't quite understand this explanation ti begin with. can anyone explain, please? I wan to make sure before I go ahead and start paying increased premiums. Thanks

 

[ShyCat]

My agent informed me that there is a "two year" wait period (?) for payout in case of unreported illness?

Yes, it's a standard clause.

I don't understand this because if the medical exam says h=me health is ok, why is there a wait period?

Because no one medical exam is going to find everything and anything. If you die within 2 years of an undisclosed illness, the insurance company will investigate to determine if you knew about it and purposely didn't disclose it (or the symptoms you had experienced), or it's just their bad luck that you became ill with something new and died.

Moreover, i didn't quite understand this explanation ti begin with. can anyone explain, please?

The purpose of this standard clause is to protect the life insurance company from people who lie on their application in order to buy a policy or to get it cheaper than their health status rates.