Even the most calm and collected person can become confused by the prospect of getting life insurance.
So many of us know we need life insurance, but we also feel we don’t understand it enough to make the best decision. Good thing at SelectQuote we know when it comes to investing your money in ANY kind of purchase, the only stupid question, as the saying sort of goes, is the one you didn’t ask.
There’s a funny thing about so-called dumb questions—a lot of people have them.
And with that, here you can find answers to some of the questions you have about life insurance but don’t feel comfortable asking out loud.
Do I Need Life Insurance?
If anyone depends on you bringing in money in order to survive, you need life insurance. It’s a great comfort to know your loved ones will have much-needed money in the event of your death.
Even if you’re single, with no dependents, you may still need coverage:
Did someone co-sign a loan for you? In the event of your death, that co-signer will be responsible for your remaining debt.
Might your health change? If you have a family history of life-threatening disease, it’ll be cheaper to get insurance now than when you’re older.
Are you planning on a funeral? It’s an unpleasant situation to think of but a policy that at least covers your funeral and burial cists can take a lot of pressure off surviving relatives.
What Kind of Life Insurance do I Need?
There are two basic types of life insurance:
Term life insurance covers you for a specified period of time.
Permanent life insurance covers you for your whole life, which is why you’ll also hear it referred to as “whole life” insurance.
As time goes by, financial responsibilities tend to lessen (kids grow up and get jobs, your mortgage gets paid off) there’s less of a need to carry a large insurance policy beyond a certain point in life. Most likely, the best bet for you will be term life insurance that covers your dependents during your income-producing years.
What About Permanent Life Insurance?
The biggest reason why most people avoid permanent life insurance is the cost. It’s more expensive than a term life policy. It also doesn’t make sense for most people. Unless there are special circumstances, there’s limited need in most families for a large life insurance payout in the insured persons later years. Permanent life insurance tends to be most useful for people who expect to leave a large estate and whose beneficiaries might need the money to help ease the tax burden on that estate.
Should I Take the Coverage My Employer Offers?
Absolutely. It’s probably a good deal and your premiums will be automatically deducted from your paycheck. Keep in mind any employer coverage you have will end if your employment ends. We’re not suggesting you’d quit your job without a game plan or get yourself fired, but we do live in a world where workforces sometimes get reduced and corporate mergers result in layoffs. It’s a good idea to have private insurance in addition to any coverage that comes with your job.
Where Do I Start to Buy Life Insurance?
Here’s a little something we know quite a lot about at SelectQuote. It’s our job to help you find the right insurance plan for you and your family. Talk with one of our licensed agents and we’ll get you the information you need to make the best choice.
How Much Life Insurance Coverage Should I Get?
There are various recommendations to estimate how much coverage you need, but nothing compares to a careful analysis of your financial situation and exactly what you might count on a life insurance payment to do for your beneficiaries. That means only you can answer this question, but it doesn’t mean you can’t get some help. Our agents are here to help answer your questions and get you the coverage you need.
Check out our online life insurance calculator. It also helps if you know what an insurance company takes into account when calculating a quote. (Here’s a clue: Pretty much everything!)
What Information Will I Need to Provide?
Every company has its own application process, but common information that most will look for includes your height, weight, date of birth (DOB), some answers to health-related and lifestyle questions and an overview of your financial situation.
So, I Need to Answer Questions and Give Some Information?
Sort of. When it comes to specific health-related questions, your insurance company will most likely help you out by requiring a medical exam. Some companies will arrange for a qualified healthcare professional to come to you. Among the basics covered by such exams: medical history, current medications, family medical history, blood pressure, heart rate, basic heart function (determined by stethoscope), height/weight check, blood/urine samples, lifestyle questions.
What Kind of “Lifestyle” Questions Will I be Asked?
Before agreeing to insure you at a particular rate, your insurance carrier will want to know if you have any habits or engage in any activities that could be harmful to your health. Some questions to expect: Do you smoke? Do you drink? How much do you drink? Do you use recreational drugs? Do you have any hobbies that involve physical risks?
What if I am Not Completely Honest on a Few Questions?
That’s a really bad idea. A company can only insure you based on the quality of the information it has to go on; if you don’t give honest answers, odds are you won’t get a policy that truly meets your needs. To use a stronger word—lying on your life insurance application company can also result in a policy being denied or cancelled once the lie is found out. And if a serious omission of truth is discovered after you die, there’s a possibility your beneficiaries won’t receive the payout you set out to provide for them in the first place.
Who Gets All This Information?
The information you provide and the results of your medical exam are given to someone called an underwriter. The underwriter’s job is to assess all of that information and decided how much of a risk the company will be taking by insuring you. Those are the basics, but you can learn more, if you’d like.
Will I Ever Need to Change Life Insurance Coverage?
Life changes. New dependents may arrive on the scene (e.g., children or elderly parents) current dependents may go out of your life, (e.g., divorced spouses or no-longer-dependent children). It’s good idea to review all of your insurance, life insurance included, at least every three years, to be sure your needs are being met and your beneficiary choices are in order.
You can get as in-depth as you want to in learning about life insurance. However much research you do, one of the most important pieces is to decide exactly what you want your beneficiaries to be able to do should you die and to then find the most straightforward policy for accomplishing that goal.
Here’s wishing you all the best in finding the right life insurance for you so you and your family have peace of mind for the long run.