Updated April 7, 2020
Life insurance is something no one likes to think about. If you’re one of LIMRA’s estimated 40% of Americans who don’t know how much or which kind of life insurance they should buy, you may not even know where to begin. Here’s a few commonly asked life insurance questions and answers:
Who needs life insurance and how much do I need?
If you have young children or someone that depends on you financially, then you need life insurance. It’s that simple. Life insurance ensures that the people who depend on you will be provided for even if the worst were to happen. One rule of thumb is to buy life insurance equivalent to 10 times your annual gross income.
What kind of policy should I buy?
The most basic feature of a life insurance policy is the death benefit: the lump-sum payment your beneficiaries would receive if you die. The life insurance policy that is right for you will depend on two things: your budget and how long you think you will need the coverage. Life insurance that pays only a death benefit and offers protection for a specific period of time is called term insurance. This type of coverage has premiums that are designed to remain level for a period of 5, 10, 20, 25 or even 30 years and it typically offers the greatest coverage for the lowest cost. You can also purchase permanent life insurance which includes an investment component in addition to the death benefit.
We would like to help you figure out what is best for you and your family. Call us as soon as you can so we can help with your life insurance needs.
Do I need to get a medical exam to apply for life insurance?
Individual term life insurance generally requires some sort of medical underwriting. How much underwriting depends on your age, the amount you’re applying for, and the company’s guidelines. In most cases the company will need to get some basic measurements and take blood and urine samples. This is done by a paramedic who will come to your home at a time that you request and schedule. You do not need to pay for this exam; it is paid for by the company. You do not need to schedule an appointment with your family doctor to apply for life insurance.
I already have life insurance through my employer’s group life policy. Isn’t that enough?
Many employers do offer employees group life insurance as a benefit. Group life coverage has certain advantages: in many cases it does not require medical underwriting, and your employer may cover some or all of the premium cost. However, having only group life insurance is not recommended because the death benefits tend to be low compared to term life insurance and you can lose your group benefits at any time. Having your own life policy under your control assures that you will still be covered even if your job situation changes.