FAQ’s
How much life insurance coverage do I need?
The amount of life insurance one needs is variable and based on multiple factors. Generally speaking, the earlier you are in your career, and the younger your dependents are, the more life insurance you will need. On average, people purchase a life insurance policy that is 10-15x’s their annual salary/bonus. You may also want to consider what debts you may owe, such as a mortgage, student loans, car loans, etc. Here is a helpful tool to calculate how much coverage you may need. If you need guidance with determining this amount, we would be more than happy to help you. Also, feel free to visit our Compare Life Insurance Page, to learn more and see which coverage is the best fit for you!
How long of a term should I select?
That depends again on how early you are in your career, the age of your dependents, the length until your retirement. Did I mention your budget as well? For example, for a young family that has a 3 year old and 1 year old, they would be best served purchasing a 30, 25, or 20 year term policy. While a 50 year old may only need a 10 or 15 year policy to get them to retirement age. If you are very early in your career, some term life companies even offer 35 and 40-year terms!
What does the quoting process involve?
We want to make sure that we are quoting you as accurately as possible so we will do a thorough health and lifestyle based questionnaire with you. This can be done over the phone or online. The more detailed information we have, the better. It would be a disservice to our clients to simply quote them the lowest price without first understanding their overall health profile. Also, it is not fun when you get quoted one price, and then after applying, the insurance company offers you a higher price. We do our best to avoid that scenario from happening, but sometimes the carriers uncover things that we were unaware of during the discovery.
How long does the life insurance application process take?
After you agree on the quote, we can either do a mini-application right then over the phone, or depending on the company chosen, a specialist from the life insurance company will call you to schedule your telephone interview and possibly a paramed exam. If needed, a licensed nurse or paramedic will come to your home and ask you the necessary health-related questions in order to complete the Part 2 of the application. They will also perform a mini physical for free, which includes measurements of your height, weight, and blood pressure. They will also collect a blood and urine sample. For older applicants and for larger face amounts, they could perform an EKG or a cognitive function test. The majority of applications are able to be completed entirely online, without the need for another phone call or visit from the exam company.
Once the exam is performed, the lab will send your results to the insurance carrier. The underwriter will assess your case and determine if he needs additional information, such as an attending physicians statement or APS. This tends to delay the process, but it is not always ordered. After receiving all of the information, the underwriter will make an offer-either a flat out decline, or an approval. Based on his findings, he will price the policy accordingly. For example, about 80% of applications are quoted as preferred plus, but only 50% of those come back approved as applied for. The bottom line is this-be honest and forthcoming with your health information, this makes the whole process quicker and more enjoyable for all parties.
Depending on the complexity of your case and the insurance carrier chosen’s case load, applications can be approved in as little as 2 days and sometimes as long as 8 weeks. The turnaround time greatly increases any time medical records are ordered.
Do I need to take a medical exam?
Not always. This depends on the insurance company you are applying with, the face amount that you are applying for, and if you pass certain health related questions. If you are in a rush to get coverage, and you don’t mind paying more for the convenience, then you can always talk with us about our fast non- medical exam term life insurance products.
Can I buy term life insurance if I am not a US citizen?
In most cases, you can apply for and purchase a policy if you are not a US citizen. You will need to show some type of permanent status, such as a green card. Some carriers will request a copy of your passport, as well as a copy of your Visa. This is an ever-changing subject, so please check in with us to see which companies we recommend.
Can I purchase a term life policy for my spouse who is a stay- at- home parent?
Absolutely. Just because they are not earning a paycheck, that does not mean the duties that they are performing daily are not valuable. Imagine having to pay someone for child care, transportation, cook the meals, all of the jobs that would need filled in their absence. It adds up very quickly. Most companies will allow the stay at home parent to purchase an amount equal to or less than the working spouse.
Should I buy a policy for my child or baby?
We do not recommend purchasing an additional policy for your child. Life insurance is meant to replace lost income. If you want a cushion if you ever had to suffer the loss of losing a child and needed to bury them, then you can always ask to purchase a “child rider.” These are sold without a medical exam as a rider to the parent’s policy. You can normally purchase them in increments of $10,000 for an additional annual cost to your policy. This would cover all of your children living at home with the parents.
I have group life insurance through my job. Do I still need an individual policy?
That is wonderful that your employer offers life insurance coverage, but can you take it with you if you leave or get laid off? Normally that answer is NO. Also, most employers offer coverage that is 1-2 times your salary-you will likely need more than that amount to be fully protected. One more thing to consider is that this policy is a group policy and it is priced at group rates. If you are in great health, then it would be to your advantage to get a quote and see how much money you could save by owning your own individual policy. The same applies to disability coverage. Ask your HR department if their life insurance policies are portable.
Is it any cheaper to pay the premiums annually vs monthly?
It is typically anywhere between 3-5% cheaper to pay your premium once a year versus paying it monthly. This is due to the hassle of setting up the auto-draft, collecting on delinquent policies, etc. It is wise to pay annually-you just have to budget for it. You can request that your bank account gets auto-drafted at the policy anniversary in order to potentially miss your annual premium payment.
Can I change my beneficiary(s) after the policy has been issued?
Yes, as the owner of the policy you can change the beneficiaries after the policy has been issued. It is just a matter of filling out a special form and getting it over to the carrier.
What happens to my policy at the end of the Term?
At the end of the level term period for a life insurance policy, several things can happen, depending on the type of policy and the insurer’s terms:
Renewal at Higher Premiums: Many term life policies offer the option to renew the policy after the term period ends, but the premiums will likely increase significantly. This is because the policyholder is now older, and the risk to the insurer is higher. Typically, they renew annually, each year the price jumps based on the new age.
Conversion to Permanent Insurance: Some term life policies allow you to convert your term policy into a permanent life insurance policy (such as whole life or universal life) without needing to go through medical underwriting. This can be a good option if you want lifelong coverage and are concerned about health changes, though premiums for permanent coverage are generally much higher than term insurance.
Policy Expiration: If you do not renew or convert the policy, it will simply expire, and you will no longer have life insurance coverage unless you purchase a new policy. You usually need to contact the insurer and have them release your auto-draft, otherwise your policy may renew at a much higher rate.