Frequently Asked Questions
Do I need life insurance?
If you have a family that depends on your income, the answer would be yes. Life insurance in its simplest form is designed to replace your income at some level. Life insurance is used in many ways. The majority of life insurance is bought to financially support your surviving family members, including covering paying off a mortgage and covering college costs.
How does the insurance company determine my premium?
Each life insurance company has a cost per thousand based on your underwriting criteria (Your age, male / female, health status, height / weight). Living a healthy lifestyle could have a significant impact on cost.
What is a permanent policy?
Unlike term life insurance which comes in 10,15, 20, and 30-year increments, permanent life insurance is designed to last your entire life. Another way to say it, it is designed to be there to pay your beneficiaries when you pass, whether you are 85, 90, or 106 years old.
Once I buy the policy, will I ever need to change my insurance coverage?
Getting married, having children, making more money, buying a bigger house, taking on more debt are indicators that would trigger an increase in coverage.
How much coverage do I need?
Most insurance planners and insurance companies recommend 7 to 10 times your annual income. Refer to our life insurance calculator to determine your personal need(s).
What type of life insurance do I need?
There are many different types of life insurance policies and many designs to accommodate the consumer today. Term insurance is a popular choice because it is cost effective. However, for those with insurance needs or wants for lifetime coverage, whole life, indexed life, and variable life provide excellent solutions.
Do I need a medical exam?
This is not a yes or no answer. Please read following sections to fully understand this question.
About 50% of all life insurance applications will require a medical exam the other 50% do not.
Technological advancements and innovation have had a tremendous impact in the life insurance business. Insurance companies have a lot more information on us than they did 20 years ago. Insurance companies pull your prescription drug history, your medical history, your motor vehicle report, your credit, your criminal background, and now they have a consumer report. Good or bad, they have this information which has made the underwriting process more streamlined and efficient.
Underwriting your life insurance now falls into two categories.
- Accelerated Underwriting *No Medical Required
- Traditional Underwriting *Medical Required
Accelerated underwriting qualifications
- As a general rule, you must be under 60 and applying for $1,000,000 or less of death benefit, though some carriers allow up to 3,000,000.
- No major medical history
- Nothing on your Prescription drug report that would indicate medical problems (example: taking insulin would indicate you are diabetic, taking blood thinners would indicate cardiovascular disease; insurance companies would want to see your blood work.
- If you meet the criteria for accelerated underwriting, no medical required.
- A phone interview is required to ask you 20+ questions about your medical history. This call is used by they underwriters and they may ask for a medical exam after review.
If you do not meet the criteria for accelerated underwriting you move to traditional underwriting.
- Medical exam is required. This is a blood draw, urine sample, blood pressure reading, height weight, and about 20+ questions about your medical history.
- Possible Medical records from your Physician.
Does it cover only if I die?
Life Insurance companies continue to manufacture new products. One of the more recent advancements is the addition of a “Chronic Illness Rider”. Each company has a different rider but in general, you would be able to access your death benefit while you were living if you had a chronic health issue and would not be able to perform activities of daily living(ADL’s). These living benefits are new and are riders on your policy.
Who can be the beneficiary?
Beneficiaries are usually close family members, business partners or banks for debt obligations but the key here is that there is a reasonable link to you as the insured and owner of the policy.
How would my beneficiary get the money?
In general life insurance proceeds go to the designated beneficiary or beneficiaries’ tax-free. After death, and proof of death, the insurance companies usually will wire or send a check to your beneficiaries.
When can my beneficiaries expect to receive the death benefit?
It usually takes insurance companies about 60 days to process a submitted claim. Some States have laws and regulations giving life insurance companies a maximum timeframe to process and issue the claim.