Life Insurance Questions

Below is a list of 50 commonly asked life insurance questions. Please note that these answers are generic, if you would like more detailed answers or have questions not listed here please call us.

What is term life insurance?
Term life insurance is one of the most popular – and least expensive – ways to get the life insurance coverage you need to protect yourself and your loved ones. Term life insurance is also one of the simplest types of life insurance, and many policyholders like the straightforward nature of the product. Unlike some of the more complicated types of life insurance coverage, term life insurance provides a death benefit – and only a death benefit – to the beneficiary or beneficiaries named in the policy. There is no investment component, only a benefit payable upon the death of the policyholder.

What is whole life insurance?
There are many different kinds of life insurance on the market, but whole life insurance has remained one of the most popular. Whole life insurance is designed to last for the entire life of the policyholder, and the amount of life insurance coverage also remains level throughout the length of the policy. There are many different flavors of whole life insurance available, and the prices can vary widely from company to company. For this reason it is important to shop around and compare coverage offers carefully.

What is universal life insurance?
While many people like the simplicity and low premiums of a term life insurance policy, others are looking for something more. For many of those insurance shoppers the answer may be a universal life insurance policy. Universal life provides a flexible premium and an adjustable benefit that builds value over time. The flexible nature of the policy means that the policyholder is free to change the amount of coverage to match his or her needs, making it easy to adjust the policy as life events dictate.

What is return of premium life insurance?
While life insurance is a must have for many people, and an important purchase for many workers, it is important to compare different kinds of life insurance policies carefully. There are many different types of life insurance on the market, and each type of insurance will have its own benefits and drawbacks. One of the most intriguing forms of life insurance is the return of premium life insurance, and it is certainly worth a look. As the name implies return of premium life insurance allows policyholders to receive back all of the premiums he or she has paid on the policy. The return of premium (ROP) policy is combined with a term life policy, and when the term expires with the policyholder still alive the premiums can be retuned.

What is guaranteed Issue life insurance?
Many people who need life insurance coverage are reluctant to apply because they feel that they will not qualify for a policy. There are many reasons why a particular insurance company would turn down a prospective policyholder, but in most cases the reasons will be related to the health of the applicant. Many life insurance companies will require either proof of good health or a full medical exam, and those who have preexisting conditions are often excluded from coverage. A guaranteed life insurance policy (or guaranteed acceptance policy), on the other hand, provides a guarantee of coverage, with no medical exam required. This type of coverage can be a good choice for smokers, those with serious medical problems and others who may not be able to qualify for traditional coverage.

What is permanent life insurance?
While term life insurance is one of the most popular types of coverage, one of the drawbacks is that after the term expires the insurance – and the premiums that have been paid – are gone. In order to maintain life insurance coverage the policyholder must embark on a new term life policy. One of the best ways to avoid this type of expiration is to purchase a permanent life insurance policy. Unlike term insurance, a permanent life insurance policy is good for the entire life of the policyholder. The permanent nature of the coverage makes this type of insurance a good choice for many people.

What is variable life insurance
While the primary purpose of life insurance is to provide a death benefit in the event of the policyholder’s untimely demise, life insurance can provide an investment component as well. With a variable life insurance policy individuals can invest the cash value of their policy in a number of investment vehicles, including stocks, bonds and or a combination of the two. This allows the investment to grow over time, providing an enhanced cash benefit as well as that all important peace of mind.

What is mortgage life insurance?
There are many reasons why an individual would want to purchase a life insurance policy to protect his or her loved ones in the event of their untimely death. One of the most common – and most important – reasons is so that those loved ones can keep the family home even in the absence of their main breadwinner. Life insurance companies have designed a product to make this goal easier, and this product is known as mortgage life insurance. Mortgage life insurance is specifically designed to pay off the mortgage in the event of the policyholder’s death, and many people enjoy the peace of mind of this special type of coverage.

What is accidental death and dismemberment insurance?
Unlike traditional life insurance that provides a benefit only in the event of the death of the policyholder, accidental death and dismemberment insurance provides additional coverage in the event the policyholder becomes permanently injured in a number of specific ways. This type of policy traditionally pays a certain benefit for the loss of limbs, with a specific dollar figure assigned to each lost limb. Many companies provide this type of coverage to their workers as a fringe benefit, and additional coverage can be purchased through many insurance companies.

What is key man life insurance?
While life insurance is most often associated with family members who are left behind in the event of a person’s death, there are many other reasons for taking out such a policy. One of the most often overlooked aspects of the life insurance business concerns the insurance that companies often take out on their own workers, and one of the most important types of coverage is known as key man coverage. Key man life insurance coverage refers to a policy that a company may carry on its top executives. This key man coverage is designed to protect the company in the event one of its key executives dies or is killed.

What is endowment life insurance?

There are many different kinds of life insurance on the market, and it is important for any would be policyholder to shop around carefully for the greatest possible amount of coverage at the lowest possible monthly premium. It is also important for those insurance shoppers to choose the right type of coverage for their needs, and one of the most intriguing options is known as an endowment life insurance policy. Unlike traditional variable life policies in which the cash value of the policy is only a small portion of the death benefit, with an endowment life insurance policy the cash value and the death benefit are the same amount.

What is no exam life insurance?
Life insurance is an important purchase, and it is important to know the rules governing the various policies on the market. One of the most important rules in the world of life insurance revolves around verification of good health, and many insurance companies require some sort of medical exam before agreeing to extend coverage. This requirement can cause some problems for those with preexisting medical conditions and other health issues, and can even cause some to forgo needed coverage. No exam life insurance provides those individuals with a viable option, and it is a good idea for those with health concerns to check these policies out. . As the name implies, there is no health exam required for coverage, providing much needed peace of mind even for those with present or past health challenges.

What is life insurance and what does it protect?
Life insurance provides vital protection for people and people and those they love by providing a cash payment in the event of an untimely death. The cash payment provided by a quality life insurance policy can help those who are left behind get back on their feet and make it through a difficult time. Life insurance can also provide much needed funds to pay bills, make the mortgage payment and other important purposes in the event the family’s breadwinner dies prematurely.

Why should I purchase life insurance?
There are a great many reasons why an individual would want to purchase a life insurance policy, but peace of mind is certainly one of the most important. Being covered by life insurance helps family members to breathe easier since they know their beloved family members are well protected. Life insurance can also provide for the needs of family members who are left behind, certainly an important consideration in today’s uncertain financial times.

Do I need life insurance if I already have a policy through work?
Many workers are already covered by life insurance provided by their employer, and many of those workers may feel that the coverage they receive on the job is sufficient to provide for their loved ones in the event of their death. However, in most cases this on the job life insurance is wholly insufficient, and it is still important to purchase additional life insurance. Depending on the employer the life insurance coverage provided could be as little as one to two times the worker’s annual salary, and this amount would likely be quickly exhausted after the death of the breadwinner. Additional life insurance can provide much needed peace of mind, and additional protection, to those left behind.

What are the different types of life insurance?
While having life insurance is certainly important, it can be difficult to find the right policy. Not all life insurance is the same, and it is important to determine which type of life insurance policy is the best fit. Some life insurance provides only a death benefit for the protection of the family, while other life insurance policies also provide an element of investment. Term life insurance, for example, provides a straight death benefit, payable upon the death of the policyholder. Whole life, on the other hand, provides an investment element as well.

How do I know which type of life insurance to buy?
Unfortunately there is no one right answer to this difficult question. The right type of life insurance will depend on a number of factors, including the age and health of the insured, the nature and amount of the household’s living expenses and more. It is important for each individual to look at his or her individual circumstances and determine which type of coverage is best. Some workers will enjoy the investment element that comes with a whole life insurance policy, while others will opt for less expensive term life insurance. Buying life insurance is a serious matter, and it is important to shop around and compare policies carefully.

How much life insurance coverage do I need?
This is another question to which there is no one right answer. The key to choosing the optimum life insurance coverage is to look at your own individual circumstances, including the living expenses of your family, your current and projected future income, monthly cash flow and of course your budget. Shopping around can help you to get the most for your money, so be sure to compare insurance offers carefully. While there is no hard and fast rule, a good rule of thumb is to purchase a policy equal to 20 to 25 times your annual salary. This amount of coverage gives your survivors a good shot at living off the earnings of the death benefit without having to invade the principal to pay their living expenses.

How does USA Quote help me find the best life insurance policy?
Finding the right life insurance coverage is one of the most important financial decisions you will ever make. The choices you make in this regard will determine the financial security of your loved ones should the unthinkable happen. With all this at stake it is vital to shop around for the best possible life insurance coverage at the lowest possible price. No matter what your age, health or budget concerns USA Quote can help you get the best coverage you can afford.

What is a life insurance brokerage?
Shopping for life insurance can be difficult and time consuming, and it can be hard to tell which policy provides the best coverage for the money. Life insurance brokerage services help life insurance shoppers cut through all the clutter to fine the best possible coverage at the lowest possible price. These brokerage services are able to compare hundreds of different life insurance policies and help their clients find a top quality term or whole life insurance policy.

What is an AM Best rating?
While life insurance is an essential purchase, the policy is only as good as the company that stands behind it. For this reason insurance companies are rated by independent agencies, and one of the most respected in the field is a company known as A.M. Best. The job of A.M. Best is to provide independent third party evaluations of insurance companies who write life insurance policies, and the A.M. Best rating provides a very good indication of the financial health of the company in question. Since all insurance companies are rated by A.M. Best based on the same rigorous criteria it is easy to evaluate the relative strength or weakness of each company under consideration.

How much does life insurance cost?
As with any other product or service, the cost of life insurance can vary quite widely depending on a number of factors. For instance, one of the many factors that affect the cost of life insurance is the age of the policyholder. It obviously costs less to insure a 20 year old than an 80 year old, and the difference is reflected in the monthly premium. The health of the policyholder can also affect the price, and many underwriters will require a medical exam prior to the policy being finalized. The type of insurance – i.e. term vs. whole life – will also play a role. That is why it is so important to shop around carefully and compare various coverage options.

How can I save money on my life insurance premium?
There are many ways to save money on life insurance premiums, but one of the most effective is simply to shop around. Shopping around can save you a great deal of money, and it is important to compare coverage offers carefully. Simple things like staying in good health, exercising and eating right can also reduce life insurance premiums. Many lie insurance companies will require a medical exam, and would be policyholders should be prepared for this important health assessment. Quitting smoking can also have a serious impact on premiums – smokers can even use the savings as an incentive to finally kick the habit.

What is the most affordable type of life insurance?
While the most affordable type of life insurance coverage will vary from individual to individual, for the most part term life insurance tends to be much less expensive than other popular types of policies. Term life insurance is meant to provide a death benefit – and only a death benefit – and it is one of the least complicated types of policies out there. Since there is no investment component the premiums tend to be much lower than similar whole life policies, and cost conscious insurance shoppers should definitely take a look at term life.

How are life insurance premiums calculated?
While the thinking behind life insurance premiums can seem mysterious at times, in fact the calculation is a fairly straightforward one. All insurance companies use special mathematicians, known in as actuaries, to create special tables known as actuarial tables. These tables are created by studying and applying mortality statistics from around the world. With this data in hand the insurance company and its actuaries use the data to classify policyholders, and that classification is used to determine the premiums that must be paid.

What is the main differences between term and whole life insurance?
There are many different types of life insurance on the market these days, but most people are familiar with term life insurance and whole life insurance. These are two of the most popular life insurance options, and it is important to understand the differences. Term life insurance is taken out for a specific length of time – like ten years or twenty years. At the expiration of that term a new policy must be written and new premiums must be calculated. The policy provides only a death benefit, with no cash value, and the premiums are typically quite low. Whole life insurance on the other hand does provide a cash value, often with a number of investment choices. Therefore whole life can act as a type of investment vehicle as well as an insurance policy. One of the tradeoffs of whole life is that the premiums are typically higher than a similar term life policy.

Can I buy a family life insurance policy?
While many people think of life insurance as a way to protect individuals and their loved ones, it can be just as important to protect the entire family from untimely loss. A family life insurance policy allows people to do just that, and such a policy can be a cost effective way to provide that much needed peace of mind. That is because pooling the cost of coverage across the entire family can keep costs down while protecting all the members of the family – from the youngest to the oldest. Since children are generally extremely inexpensive to insure, the younger members of the family can easily be added to the policy, providing excellent coverage for a great price.

What is a health class?
When it comes to purchasing life insurance class is a very important distinction. The health classification into which an applicant falls can have a profound effect on the cost of coverage, and it is important for insurance shoppers to understand the various classifications insurance companies use to rate their policyholders. Life insurance companies often will require their applicants to undergo a medical examination in order to determine their current level of health and any potential health problems. The insurance company uses a number of health classifications to group their members, including preferred plus, preferred, standard plus and standard. Preferred plus is the top tier, but only a small percentage of applicants will fall into that prestigious class. The rest of the policyholders will fall into one of the other groups, and their premiums will reflect that distinction.

What is preferred plus health class?
The health of an applicant can play an important role in the life insurance premiums that applicant will need to pay. The better the overall health of the applicant the better the premiums can be, and it is important for anyone contemplating the purchase of a life insurance policy to understand how health can affect the cost of coverage. Life insurance companies typically group their policyholders into a number of health classifications, and set their premiums based in part on this information. The healthiest policyholders are placed into the preferred plus health classification, and those policyholders typically enjoy the lowest premiums.

What is preferred health class?
When life insurance companies classify their policyholders they typically use classifications like standard, standard plus, preferred and preferred plus. While preferred plus is the top health classification, only a small percentage of applicants will fall into this category. The next category in line is known as preferred class, and those policyholders who fall into this category can also enjoy some significant premium savings.

What is regular/standard health class?
When it comes to life insurance coverage it pays to be preferred. Those policyholders who fall into the health classifications known as preferred plus and preferred typically enjoy significant premium savings, while those in lower classifications generally pay higher premiums. Unfortunately only a small percentage of insurance shoppers will qualify for the preferred plus or preferred health classifications; the remainder will be classified as regular or standard health classifications. Standard health classifications are used for those who are in generally good health, while the preferred classifications are used for those whose health is exceptional.

What is the cash value of life insurance?
One of the many benefits of carrying an insurance policy is that the policy may be able to provide cash when it is needed. While term life insurance provides only a death benefit, universal life, whole life and other forms of life insurance also provide a cash benefit to their policyholders. This cash value can be accessed even while the policyholder is still alive, providing a new level of flexibility and value. The cash value of a life insurance policy will vary from policy to policy, and that cash value can be affected by a number of different factors including how long the policy has been in force and the rate of return on any investments.

What are the different length of coverage for a term life policy?
Cost conscious life insurance shoppers have long enjoyed the significantly lower premiums of term life insurance, and this type of insurance coverage continues to be one of the most popular. One of the benefits of term life insurance is that the term of coverage and the premiums are both determined up front, making it easy to compare different policies and different levels of coverage. Another advantage is that life insurance shoppers can choose from a wide range of terms, including 5, 10, 15, 20, 25 and 30 year terms.

Can I have multiple life insurance policies?
Many people do in fact have more than one life insurance policies in place, but it is important to shop around carefully for each type of coverage. Many workers have a basic level of life insurance coverage provided by their employer, often equal to a percentage of their base salary. In addition some companies offer their employees the opportunity to purchase additional coverage at preferred rates, and many workers choose to take advantage of this benefit. But in many cases this coverage is not sufficient and those workers look to private companies to provide their family members with the peace of mind they deserve.

Can I buy life insurance for a family member?
Life insurance provides many benefits for both the policyholder and their loved ones. One of the most important benefits of life insurance is the peace of mind it provides to all members of the family. Buying life insurance for a family member is a great way to provide that peace of mind, along with all the important financial benefits that come with this type of coverage.

What is a life insurance medical exam?
Life insurance is a serious purchase – for both the policyholder and the insurance company. Both the insurance company and the individual buying the insurance have a serious stake in the matter, and most insurance companies will want to see proof of good health in those they insure. For this reason many insurance underwriters will require some sort of medical exam before the policy is finalized. A life insurance medical exam is intended to determine the health status of the insured, and it is an important part of the insurance shopping process.

What is a beneficiary?
The whole purpose of life insurance is to provide peace of mind to you and a secure stream of income to your loved ones. When the policyholder dies the proceeds of the life insurance policy are paid to the beneficiary or beneficiaries that are named on the policy. It is to those beneficiaries that the payment is made, and it is important for the policyholder to name this person at the time the policy is started. In most cases the beneficiary of an individual’s life insurance policy will be a family member – often a spouse or a child.

How often do I pay my life insurance premiums?
While most life insurance policies will require premiums to be paid on a monthly basis, there may be more options available. Some life insurance policies may allow policyholders to pay their insurance premiums on a biweekly, semiannual or annual basis. It is important for life insurance shoppers to ask about the various payment options and choose the payment option that works the best for their situation. Some life insurance companies make paying premiums even easier by providing the ability to have the amount deducted from a checking account or even charged to a credit card.

Is life insurance tax deductible?
While life insurance is an important purchase, it is unfortunately not a tax deductible expense. Even with the lack of tax deductibility, however, life insurance is a valuable addition to your financial security. Anyone who has family members who rely on them should consider purchasing life insurance to protect those family members. Anything can happen, and life insurance is designed to provide your beneficiaries with a cash benefit in the event of your untimely death. Even though life insurance premiums and other expenses are no deductible from your taxes, the money spent on life insurance provides something much more valuable – peace of mind for you and your family.

What happens if my life insurance policy lapses?
Life insurance is a vitally important purchase, providing much needed peace of mind and valuable cash benefits in the event of the policyholder’s death. Those benefits can only be enjoyed, however, when the policy is in force, and it is important to take positive steps to avoid a lapse in coverage. In many cases the life insurance company will provide some sort of grace period – often between 60 and 90 days – during which the policyholder can catch up on any missed premiums and keep the policy in force. After the grace period has expired, however, the policy can become null and void.

Do I get anything back if I cancel my life insurance policy?
This is a commonly asked question, and the answer depends on the nature of the life insurance policy and the type of insurance. In many cases a whole life insurance policy will provide some sort of cash value – although that cash value is likely to be far less than the death benefit that would accrue if the policyholder were to die. Term life insurance, on the other hand, provides only a straight death benefit with no cash out value. Current policyholders should check their paperwork or ask their insurance agent for information about any possible cash value.

What should I do if I can’t pay my life insurance premium?
While in a perfect world life insurance policyholders would always be able to pay their monthly premiums, there are in fact times when those payments are out of reach. When a policyholder finds that he or she cannot make the required insurance premium payments it is important to contact the insurance company or insurance agent as quickly as possible. In some case it may be possible to work out a payment schedule to keep the policy in force while partial payments are being made. By being proactive policyholders who have fallen behind in their monthly premium payments may be able to preserve their coverage and keep their life insurance coverage from lapsing.

When should I update my Life insurance policy?
Life insurance is a major purchase, but it should not be a one time purchase. It is important for policyholders to periodically evaluate their policies in order to determine that their level of coverage is still adequate. If it has been awhile since you first took out your policy it may be a good idea to go back and reevaluate. Some workers like to do an annual insurance checkup when they do their taxes, and this can be a good policy. At a minimum policyholders should reevaluate their life insurance holdings anytime they experience a major life event – like a marriage, a divorce or the birth of a child. It is also a good idea to check coverage anytime you get a significant raise at work, since your old level of coverage may not be sufficient for your family’s new lifestyle.

How do I update my Life insurance policy?
When it is time to make changes to your life insurance policy a good first step is to contact your insurance agent or the company that holds the policy. It is a good idea to prepare for that initial contact by making a list of the changes you intend to make. Perhaps you want to increase the level of the death benefit or change the name of the beneficiary. Having this information at your fingertips will make it easier to get these changes completed in a timely manner and at a reasonable cost.

Can a smoker get life insurance?
Anyone who is in the market for life insurance needs to know that his or her health – both current health and projected health – will play an important role in both the ability to get coverage and the premium rates for that coverage. Smokers can be at a distinct disadvantage when it comes to purchasing life insurance, and quitting before seeking coverage is always a good idea. Even so, smokers can qualify for life insurance coverage, albeit at higher rates than those paid by nonsmokers of similar age. The key is to shop around and to be honest when filling out the paperwork. Claiming to be a nonsmoker on the application could make the policy null and void when it is needed.

Can a person with HIV or AIDS get life insurance?
While the health of the applicant certainly does have a role to play in the world of life insurance, it is possible for those with serious health challenges, including HIV and AIDS, to get the coverage they need to protect themselves and their family members. While the cost of that coverage is likely to be higher – perhaps significantly higher – than for healthy people of similar ages – the coverage is available from a number of life insurance companies. As with any type of life insurance coverage, the key to getting the best deal is to shop around widely and to compare various coverage options.

How do I file a life insurance claim?
Filing a life insurance claim is never a pleasant experience, but a little bit of preparation can make the job a little easier. One of the most important preparations is to obtain several copies of the death certificate for the policyholder. This will make it easier to fill out the paperwork and get the process underway. Once those documents are in hand the next step is to contact the insurance agent and inform them of the death. The insurance agent can help the family members fill out the required paperwork and get the benefits they deserve. The insurance agent can also help those family members determine which type of payment is the most appropriate. Some policies will provide beneficiaries with a choice of payments – including lump sum payments and regular monthly payments.

What is a death benefit?
The whole purpose of life insurance is to provide money to your loved ones in the event of your untimely death. When the breadwinner in the family dies those left behind can have serious difficulty keeping up with the bills, paying the mortgage and making ends meet. The death benefit provided by the life insurance policy is intended to help with those expenses and make moving on easier. The death benefit for a life insurance policy is typically provided in a lump sum equal to the amount of the policy. That lump sum can then be invested in order to provide the income the beneficiaries will need to move on with their lives.

What should I do if I can’t find my life insurance policy?
Life insurance is an important part of your financial life, and it is important to treat those insurance related documents with care. Even so, it is possible for a policy to become misplaced, and it is important for policyholders to know what to do when such an event occurs. One of the first things policyholders can do is contact his or her insurance agent. The insurance agent should be able to look up the records, find the policy number and provide a new copy of the policy. Calling the company directly can help as well, since the customer service agents may be able to look up the policy number or account number using Social Security numbers and other personal information.

What should I do if I can’t find a family member’s life insurance policy?
One of the most frustrating situations a person can find themselves in is trying to determine whether or not a deceased family member had a life insurance policy. When family members die they often leave few financial records behind them, and that can make it difficult to find insurance information. One of the best places to start the search for a lost policy is with the individual’s checkbook. Looking for cancelled checks written to an insurance company can provide a good starting point. If you find those records contact the insurance company and ask if the family member in question had a policy. If that fails you can also write to the largest insurers in the area and ask about any possible coverage. The insurance commission in your state may be able to help as well, so be sure to write to them as well.

START HERE

Life Insurance Questions

START HERE

Life Insurance Questions

Insurance Articles

Insurance Resources

Contact Us

Insurance Articles

Quick Links

Disclaimer: