Term Life Insurance
Q: Who can buy life insurance?
A:
Almost anybody can buy life insurance, but underwriters evaluate certain criteria in approving your policy. First and foremost, there must be a need for life insurance, in other words, an insurance company will not give a million dollar policy to someone simply because they want it or because they are willing to pay for it. Also, underwriters typically make sure you can afford the life insurance premiums; if you don’t have the income required to pay the premiums, it’s likely you won’t get approved. As long as there is a need for life insurance, you can afford the premiums, and you fit the health and lifestyle criteria required by the life insurance provider, it’s likely that you will be approved.
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Q: Who can I choose as my beneficiary?
A:
In almost every state, there must be an insurable interest between you and your beneficiary. This means that there must be a valid reason as to why you are taking out a life insurance policy and choosing a certain individual as your beneficiary. For example, most companies won’t allow you to name your neighbor as your beneficiary, since there is typically little insurable interest. In some states this law doesn’t apply and insurance companies will actually let you list your neighbor as your beneficiary and can’t ask you if there is an insurable interest. For the most part though, it simply needs to make sense.
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Q: How do I get cheaper rates?
A:
Life insurance rates have fallen substantially over the years, making it much more affordable. Statistics show that millions of people are still overpaying on their life insurance policy though. With the use of the internet, shopping for life insurance couldn’t be easier today. You can receive rates from top insurance companies at no cost or obligation with just a few clicks. Click here to receive rates from a licensed life insurance agent and make sure you’re not one of the millions of Americans overpaying for life insurance.
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Q: How do I get more life insurance?
A:
As a general rule of thumb, financial advisors typically recommend you to have 7-10 times your annual income in life insurance coverage. If you would like you have a mortgage, other debts, or would like your children to go to college, then you would increase your coverage by that amount. Also, recent studies show over 50 million Americans feel they don’t have enough life insurance coverage. Click here to instantly receive life insurance quotes and ensure you have enough coverage.
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Q: How are premiums calculated?
A:
Life insurance companies take numerous factors into consideration when deciding your life insurance rates, including your current health and lifestyle, medical conditions, past medical problems, age, weight, actuarial tables, and other complex statistics. Ultimately, your life insurance rates are based on risk. For example, individuals who are in good physical shape, are healthy and don’t smoke are much less risk for an insurance company as opposed to those who are overweight, have high blood pressure or cholesterol, and other unhealthy habits.
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Q: What if I want a term life insurance policy that builds cash value?
A:
Until recently, only permanent life insurance policies allowed the building of cash value. A relatively new product, called return of premium, is a term life insurance policy that returns all the premiums paid into if you outlive the policy. If you decide to cancel the policy early, a percentage of the premiums will be returned. Return of premium policies are more expensive than level term life policies, yet still cheaper than permanent life insurance.
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Q: Can I cancel my policy at anytime?
A:
Yes, almost all life insurance policies allow you to cancel at anytime without penalty. It is important you double check this with your life insurance company or on your policy.
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Q: What can I do when my policy expires?
A:
If you have a term life insurance policy, it will expire after a given time period, meaning you will no longer have coverage. As you get older, the need for life insurance is still there, but typically it is much less than earlier in life. When your policy expires, you can either renew it annually based on your attained age (which is results in a more expensive premium) or purchase a new policy. If you have developed a severe medical condition, it may be less expensive to renew your current life insurance policy than purchase a new one.
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Q: When should I buy life insurance?
A:
When it comes to buying life insurance, the time is now! As you get older your premiums will increase, so it is imperative to buy life insurance sooner than later. Studies show millions of Americans acknowledge they need life insurance, but still haven’t purchased it. Click here to receive a free life insurance quote from a licensed agent today.
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Q: Do I have to take a medical exam?
A:
Most life insurance policies will require you to have a short medical exam. Typically this quick 15 minute exam consists of a nurse measuring your height and weight, checking your blood pressure, and taking a blood and urine sample. Individuals applying for more coverage may be required to have a more thorough medical exam. Some insurance companies also offer life insurance policies that don’t require medical exams, but usually these don’t offer face values over 100k.
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Q: Who can my beneficiaries be?
A:
In most states, there must be an insurable interest between you and your beneficiary. This means that there must be a valid reason as to why such person is being designated as your beneficiary. If they depend on you financially, typically that is reason enough.
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