Frequently Asked Questions

To help you make the right insurance decisions for you and your family, read through these 10 important questions and answers. They'll help you make an informed decision when it comes time to make a life insurance purchase.

Key Considerations
•How much life insurance do I need?
•What type of policy should I buy, term or permanent?
•What are accelerated death benefits and how do they work?
•What is Non-Medical or Simplified Underwritten Life Insurance?
•By using medical tests are insurers trying to eliminate any applicant likely to develop a serious health condition?
•What should I consider in naming life insurance beneficiaries?
•What happens if I fail to make the required premium payments?
•Should I just buy basic life insurance coverage or is it worth considering the "bells and whistles" that some policies offer?

How much life insurance do I need?
Determining how much life insurance you need requires a careful examination of your current and future financial obligations (i.e., a combination of (a) what would it cost to help your surviving family members meet immediate and ongoing needs like funeral costs, taxes, food, clothing, utilities, mortgage payments, etc. and (b) future obligations like college and retirement funding) and the resources that your surviving family members could draw upon to meet those obligations (i.e., your spouse's income, savings and investments, other income producing assets, and any life insurance you might already own).

The difference between the two (your financial obligations minus the resources your family has to meet those obligations) is the approximate amount of additional life insurance you need

What type of policy should I buy, term or permanent?
It's impossible to say which is better because the kind of coverage that's right for you depends on your unique circumstances and financial goals. But generally speaking, term offers the greatest coverage for the lowest initial premium and is a great solution for people with temporary needs or a limited budget. Permanent insurance may make more sense if you anticipate a need for lifelong protection and like the option of accumulating tax-deferred cash values, but the cost for such a policy is generally more expensive than a term life insurance policy. Also, it doesn’t have to be either one or the other. Oftentimes, a combination of term and permanent insurance is the right answer.

What are accelerated death benefits and how do they work?
Many policies contain a provision that allows a terminally ill person to collect a significant portion of his or her policy's death benefit while that person is still alive. The money can be used to get one's family finances in order, pay for uncovered medical expenses, or simply do certain things for your family or friends while you still can. It's important to note that the amount you take out while still living will is subtracted from the death benefit payments to your beneficiaries along with an interest charge to account for early payment of benefits.

What is Non-Medical or Simplified Underwritten Life Insurance
Today consumers are living in a world of instant information: In the decade of wanting everything completed in minutes, is there any surprise that life insurance companies would create instant issue policies for consumers who want to obtain instant quotes, apply, purchase, pay for and receive instant protection online? This gives buyers the ability to reduce the application and approval process time from months to days or in some cases minutes and also improves the overall buying experience.

What exactly is Non-Medical or Simplified Underwritten Life Insurance?
Non-Medical or Simplified Underwritten term life insurance is a convenient term life insurance policy for those that prefer to avoid dealing with scheduling agent appointments or feeling as though they are being sold a policy with more bells and whistles than they may actually need. The whole process can be initiated by answering some simple health questions and submitting an online application through an online platform which allows the consumer to research, compare, and immediately buy a policy without even talking to the agent unless they want to, there are generally no medical examinations (blood and urine samples) required to put the policy in force. This simple convenience can make a not so enjoyable process to be quick and painless and allow a family member to obtain some basic form of insurance protection to cover against a tragic loss or sickness.
By using medical tests are insurers trying to eliminate any applicant likely to develop a serious health condition?
Medical tests provide accurate and current information about an applicant's health, thus enabling insurers to charge premiums that reflect the level of risk an applicant represents. Because some health conditions are easily managed through proper medication, therapy or lifestyle changes, medical information makes it possible for insurers to cover applicants with certain health conditions. More serious or incurable conditions present a very significant risk that some insurers simply may not want to assume.

What should I consider in naming life insurance beneficiaries?
1. Always name a "contingent," or secondary, beneficiary, just in case you outlive your first beneficiary.
2. Select a specific beneficiary, rather than having the proceeds of your life insurance paid to your estate. One of the great advantages of life insurance is that it can be paid to your family immediately. If it is payable to your estate, however, it will have to go through probate with the rest of your assets.
3. Be very specific in wording beneficiary designations. Saying "wife of the insured" could result in an ex-spouse getting the proceeds. Naming specific children may exclude those born later. If your child dies before you, do you want the proceeds to go to that child's children? Changing the beneficiary designation is easy, but you have to remember to do it. Due to the various issues involved, an agent can be an excellent source of information to help you properly set up your beneficiary designation.

What happens if I fail to make the required premium payments?
If you miss a premium payment, you typically have a 30- or 31-day grace period during which you can pay the premium with no interest charged. If you own a term policy and fail to pay your premium within the grace period, your insurance company will typically terminate the policy. If you own a permanent policy and fail to pay your premium within the grace period, your insurance company, with your authorization, can draw from your policy's cash value to keep the policy in force. In some flexible-premium policies, premiums may be reduced or skipped as long as sufficient cash values remain in the policy. However, this will result in lower cash values and a shortened coverage period.

Should I just buy basic life insurance coverage or is it worth considering the "bells and whistles" that some policies offer?
Whether you should consider adding a rider to a policy you're considering really depends on your specific needs, objectives and budget. Here are a few riders that you at least should take a close look at and consider. A disability waiver of premium rider stipulates that if you become totally disabled for a specified period of time, you don't have to pay premiums for the duration of the disability. Why might you want to consider such a provision? Disabling illnesses and injuries are much more common than you probably realize. If you become disabled and your income declines or disappear for a period of time, a disability waiver of premium can ensure that your life insurance policy will remain in force.
An accidental death benefit is another common rider. It will pay an additional benefit in the case of a death resulting from an accident. Many companies offer accelerated death benefits, also known as living benefits. This type of rider allows you, under certain circumstances, to receive the proceeds of your life insurance policy before you die. Such circumstances include terminal or catastrophic illness, the need for long-term care, or confinement to a nursing home. Ask your agent for information about these and other policy riders.