Life Insurance 101

Why should I purchase life insurance?
To provide income for your family and loved ones if you should die prematurely. Life insurance benefits are generally received tax-free (consult your accountant)

How much life insurance should I purchase?
If you have a family, we suggest 7-10 times your annual pay. Your individual need will vary and typically increase over time due to inflation and other factors.

When does the policy begin?
Most companies provide temporary or conditional coverage while they are underwriting (reviewing) your application. Typically you are required to submit your first premium payment with your application for this coverage to occur. Generally, your policy will not begin until you receive it in the mail from your agent. If you are replacing existing coverage, we highly recommend not cancelling any existing coverage until your new policy has been issued, delivered and your first premium paid.

Is a medical exam necessary to qualify?
Most policies require an exam. The insurance company will pay the costs and have it done at a time and place convenient for you -- usually right in your home. A typical exam will include a blood test and urine specimen, blood pressure reading, height and weight measurement, and a series of questions about your health.

When I send in my application, should a check be included?
If you send the first premium check along with your application, most insurance companies will provide limited coverage during the application/underwriting process. There is no requirement that you submit premium with your application. You can pay the premium once the policy has been approved.
What's the difference between standard and preferred rates, and how do I qualify for preferred rates?
Excellent health is required for all preferred rates.

Should I get coverage on my spouse and/or children?
Often, families will secure life insurance on both spouses. In addition to final expenses, the financial burden on a family after the premature death of a loved one can be substantial. Often the surviving spouse will take time off work, or change careers to spend more time with the children. Coverage for children is available for final expenses and also to guarantee the child's future ability to remain insured.

Will my policy ever be canceled for health reasons?
If you keep your premiums paid on-time, your policy can never be canceled because of a change in your health, and you will not be asked to provide evidence of health in order to renew your policy each year.
You may cancel your policy at anytime.

Does smoking/Nicotene use affect my rate?
Rates for Nicotene users are higher than for non-Nicotene users.

After the initial period of guaranteed premiums, what will my term insurance cost?
Permanent life insurance policies (Whole Life and Universal) typically have a level premium for life. Term policies however only guarantee the premium for a limited number of years.
A term policy comes with a guaranteed maximum renewal premium which will be illustrated. This represents the highest amount you will pay to keep the policy.
Many modern term life policies come with long guaranty periods. (Up to 30 years)

Is there a money-back guarantee?
A full refund of your premium is guaranteed until ten full days (up to 30 days in some states) after your policy is delivered to you.

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