Why should I get life insurance? How much does it cost? What does it cover? These are some of the most asked questions when someone hears the words life insurance. In this article, we will discuss the top popular 10 questions about life insurance and provide you with the answers. It’s very crucial for people to understand the basics of life insurance in order for them to choose the most suitable product for them and their families.
#1 How Much Coverage Do I Need?
This is usually the first question people ask themselves. It will identify the best kind of policy for you and that you are not paying too much for coverage. You should pay attention to the choices that suit your individual’s budget and needs.
If you don’t have any idea how much, there are plenty of ways you can calculate approximately how much you really need. One of the effective ways is to use the LIFE calculator. Here’s how this LIFE calculator works:
Living expenses (mortgage, car loan, credit card expenses, and many more)
Income replacement (normally 10x the yearly income)
Final expense (the standard burial in the United States modifies between $5,000-$10,000)
Education (college finance for the kids)
#2 Do I Need Life Insurance?
You don’t really need to buy life insurance. Most likely, if you don’t have any children or dependents whom you are supporting financially, you may not need a life insurance policy after all. Life insurance is intended to offer a solution for those who attempt to find income replacement, estate planning, mortgage protection, leaving an inheritance, or burial expenses. But if you have people you love and care for is depending on you financially, you need life insurance.
#3 Where Should I Buy Life Insurance From?
Nowadays, when it comes to buying life insurance, you have so many various options. A lot of people will buy directly from their life insurance agent. A few people prefer to purchase life insurance online. The only piece of advice you need on this is to make sure to shop around.
You may even use the free quote engine on the insurance company’s website you interested to buy from since it will most likely provide you with a fast and accurate life insurance quote so you can determine how much out-of-pocket expense you’re looking forward to.
#4 What Type of Life Insurance Do I Need?
For you to answer this question you must understand the reasons why you’re buying coverage in the first place and how much coverage you require. There are two main categories of life insurance: permanent insurance and term insurance. Some people would go for term insurance and some on a permanent plan. In most situations, a combination of both would be the greatest solution. It all depends on your needs and budget.
Term Insurance, as the name suggests, is coverage for a stated period of time. It may be for just 1 year or all the way up to 30 years. Term insurance commonly provides the biggest insurance protection for your premium dollar. A lot of insurance companies allow the option to convert a term policy into a permanent one, throughout the conversion period. This is normally done without having to show insurability.
On the other hand, permanent insurance is obviously permanent. The best thing about choosing permanent insurance is the assurance and peace of mind you are given that you would not outlive the policy. Plenty of these policies establish cash value, that can be used while you are still living.
#5 Is It Hard to Pass a Life Insurance Exam?
If your health is fine, then you won’t have any problems or whatsoever. You need to make sure that you drink a lot of water a few days prior to the medical exam and do what the nurse tells you, especially if they ask you to fast in the morning. However, if you can’t continue with it, there is always no medical exam policies. But you pay more for these than if you can qualify under average underwriting but the process is quicker and is the best option for the right person.
If you’ve learned that the medical exams are tough to pass, or if you got declined before, don’t think that a no medical exam plan is your sole option. Every company has a different process that they go through. Don’t worry if one insurance company rejects you, not all company is going to. The important thing is that you are able to find a new company that is going to welcome your plan.
#6 Who Can Be My Beneficiaries?
A beneficiary is anyone who may experience hardship due to the financial loss of one’s death. For instance, children, husband or wife, business partner, and etc. Once you become a policy owner, you will have to select the beneficiary at the time of the application process. In many cases, the beneficiary can be replaced if you request and sign a one-page document. However, there are situations when you won’t be able to make any changes to your beneficiaries.
#7 What Happens If I Miss Paying the Premium?
Normally, almost all policies have a 31-day grace period wherein you can pay the premium with no penalty or interest. However, if your policy is a term and you fail to pay within the given grace period, the insurance company has the right to terminate the policy. Meanwhile, if the case is having a permanent policy, you can allow the insurance company to take out your premium from your policy’s cash value.
#8 Will It Only Covers If I Die?
This is usually one of the most asked life insurance questions companies and agents get. The answer here is not really necessary. There are a lot of companies that provide life insurance policies with living benefits assembled into the coverage.
That is to say, you don’t have to die in order for you to utilize your life insurance. As a matter of fact, there are living benefits that you can ask from a life insurance policy.