Why should I buy life insurance?
Life insurance can protect your family and loved one who depend on you financially. You can also use it for retirement income, to finance tuition for your dependents, as collateral for loans and for cash withdrawals.
When should I review my life insurance?
If you experience any key life events, you should review your current life insurance policy. These include buying a new home, starting a new job, caring for an elderly relative, taking out a large loan, divorcing, retiring, getting married or having a child.
How much will it cost for life insurance?
The amount you must pay varies according to several different factors such as how much coverage you wish to purchase, your age, the status of your health, your lifestyle habits and the type of life insurance policy you purchase. You should contact your life insurance provider to determine the specific amount.
Will I need to complete a medical test to qualify for life insurance?
You have to fill out a medical questionnaire when you apply for life insurance. You may also be required to complete other medical tests depending on the type of life insurance you are requesting and your age.
What will the medical tests involve?
The tests vary according to your life insurance provider, but they may include taking an electrocardiogram or ECG, having a chest x-ray taken, undergoing a blood test or providing an oral fluid or urine sample.
Will I have to pay for any medical tests that are required?
No, your insurance provider should cover the costs of any required tests.
What health factors are considered when determining the amount of life insurance I have to pay?
Several factors may affect your eligibility for life insurance and the amount you must pay. These include hobbies, driving record, occupation, family history, current health, height, weight, medical history and whether you have ever smoked.
If I have had serious health issues such as cancer or a stroke, can I still obtain life insurance?
Many individuals who have suffered a stroke or have diabetes, cancer or coronary artery disease may still be eligible for life insurance. The difference is that their current health status will not allow them to obtain the best rates so their premiums will be higher.
What is term life insurance?
This type of policy has a specific end date and is usually less expensive. For example, your policy may specify that coverage stops as soon as you turn 85.
What is permanent life insurance?
This type of policy is usually more expensive than term life insurance, because it provides life insurance coverage for your entire life.
What is universal life insurance?
This combines an investment plan with permanent life insurance. A portion of every premium is used towards your life insurance with the balance deposited into an investment plan. This can help you protect your family and your financial future.
What is group insurance?
This type of life insurance policy is a single contract that covers a group of people. Most policy owners are employers or entities such as labor organizations, and they offer more affordable rates that are included as part of your employee benefits package.
If I have group life insurance, do I need to purchase individual life insurance as well?
Group life insurance offered by your employer is usually available at a lower price. However, you have to consider whether your current plan provides adequate coverage and if coverage will continue if you leave your job. You may need to apply for a new individual policy after leaving your job which may result in higher premiums because of your current health status or age.
Why do my activities and hobbies affect my life insurance policy?
Certain activities expose you to a higher degree of risk and will affect the premiums you pay for your life insurance. For example, you may pay more if you regularly scuba dive, fly a plane, have a history of speeding tickets or frequently travel to certain areas of the world.
What are the different risk categories for life insurance?
The ideal risk category is a "preferred" risk or below-average risk of early death. This is followed by a "standard" or average risk of death. If you fall under the "substandard" category, you can still purchase insurance even though you´re considered an above-average risk of death. If you fall under the "uninsurable" or high risk category you can not obtain life insurance because of the high probability of early death.
Can I choose an individual who is not a relative as a beneficiary for my life insurance policy?
Although most people name a spouse, parent, child or other relative as their beneficiary, you can also name a non-relative such as a business partner, trust or estate. This depends on the particular state in which you live so be sure to check with your insurance provider.
Do I have to pay smokers´ rates if I smoke a cigar once in a while?
Smokers always pay more for their life insurance premiums than non-smokers, and they are often categorized as moderate smokers (20 or less cigarettes a day) and heavy smokers who smoke more than 20 cigarettes a day. Certain insurance companies may not charge you more if you smoke less than 12 cigars a year for example, whereas others may charge you the same as cigarette smokers. Still others consider cigar smokers as nonsmokers, so you really need to consult with your insurance provider.
What is insurable interest?
If you wish to purchase a life insurance policy on someone else´s life, you need to have an interest in that person remaining alive or expect a financial or emotional loss if they die. This is called insurable interest, and it prevents people from purchasing insurance policies on elderly strangers and then collecting the money when they die.
How can I lower my insurance premiums?
There are several ways to lower your insurance premiums. You can stop smoking, lose weight or begin exercising to improve your health status. Another option is to look for a life insurance company that offers competitive rates for people who have cancer, diabetes, heart disease or other serious health problems. Obtain quotes from several different insurance companies and make sure to ask about any hidden fees.
Should I purchase a separate life insurance policy for my child?
Some companies will allow you to add a child death benefit rider that is normally limited to $5,000 or $10,000 to your existing life insurance policy. However, you can purchase a separate policy on your child´s life. Unless your child is earning a lot of money as a model or actor, you are probably wiser to wait until he/she becomes an adult before considering life insurance.
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