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 Frequently Asked Questions About Life Insurance

The following is a list of frequently asked questions about asset protection, income protection, and life insurance. Get answers to your questions by clicking on the frequently asked questions below. If you have specific questions, contact us.

1. How much life insurance do I need?
2. How is my "Health Class" and resulting rate determined?
3. I have a health problem. Can I get life insurance?
4. What's the difference between term insurance, whole life insurance, and universal life insurance?
5. Does it make sense to replace a policy?
6. When will the policy begin?

 How much life insurance do I need?

If you are providing financial support for people who are depending on you, you need life insurance.

There are some old and dated rules that no longer apply to life insurance....In the past, you may have heard that a good rule of thumb is 5-10x income for life insurance. The reality is that many insureds in this day and age will need 15-20x income.

A great independent source for determining your life insurance needs is LIFE - Life and Health Insurance Foundation for Education.  This is an independent organization that focuses on providing educational information to consumers about life insurance.

Click HERE for additional information about LIFE

In today's environment, a detailed needs analysis will factor in your income, assets, survivor needs, education needs, retirement needs and more and will provide you with a custom tailored plan. You can then choose the amount of coverage for you. Return to Questions

 How is my "Health Class" and resulting life insurance rate determined?

Each life insurance company uses their own underwriting criteria to determine which health class you will qualify for and your resulting life insurance rates.

In fact, it is entirely possible for the same person's health class to rate as "Standard" with one life insurance company and "Preferred" with another life insurance company! Some factors such as smoking can have a direct impact on determining your health class.

Click Here for life insurance underwriting guidelines information

Life insurance for health problems

There are many life insurance companies available that specialize in getting you coverage.  If you have a health problem, we have a number of companies, called impaired risk life insurance companies, that will do a great job at underwriting you based on your specific health issue.  We are the impaired risk life insurance experts.

EVEN if you have been declined for life insurance in the past, you may be able to obtain life insurance coverage. It definitely pays to try. We can help. Return to Questions

 What's the difference between term insurance, whole life insurance, and universal life insurance?

Term Insurance is typically the least expensive of life insurance policies and allows you to obtain the maximum benefit for the lowest cost. In the majority of scenarios, term insurance may be the best way to go.

Whole Life Insurance is also called "permanent" insurance. It can be kept in force for as long as you live provided that the policy performs according to assumptions and projections and you have paid sufficient premiums into the policy. The face amount and the premium are fixed at the time you buy your policy and stay the same as you age, BUT be careful! Certain assumptions are built into this type of policy such as interest rate assumptions, projected dividends, etc. If the assumptions are correct, the policy may build cash values over the course of time. If these projections are wrong, you will end up with an unpleasant surprise such as an additional premium notice or a lapse notice!

Universal Life Insurance is also called "permanent" insurance. With this type of policy, there is the potential for cash value to build up over time, but the real focus is to provide a guaranteed death benefit to age 100 and beyond! It is very similar to a term policy that does not end.

In many cases where the insured is age 60 or greater it may pay to compare universal life to term insurance as the premiums may be similar. Return to Questions

 Does it make sense to replace a policy?

It ALWAYS makes sense to shop around, and it may make sense to replace your policy if:

• Your premium increases each year. Even though you are older now then when you first purchased your life insurance policy, a term policy with level premiums may be less expensive than the increasing term premium policy. It pays to shop.
• Your original policy was issued at a higher rate due to health issues. Each life insurance company uses different underwriting guidelines, if you are with the wrong life insurance company you may be able to save. This may be especially true if you were table rated for life insurance.
• Your health status has improved: If your health has improved through exercise, weight loss, better blood pressure or cholesterol control, etc. you may be able to obtain a better life insurance rate.
• You quit smoking or changed your smoking habits. If you are a former cigarette smoker, you should definitely shop around for a better life insurance rate. As soon as you have been a non-smoker for 12 months or more, non-smoker rates are available to you. If you have always been an occasional cigarette smoker, there is a life insurance company available that may offer you non-smoker rates.
• Other tobacco use: cigar, pipe, chew, snuff users. If you are paying a smoker/tobacco rate, you are paying too much for life insurance as non-tobacco rates are definitely available to you.

You may find that after shopping for life insurance, your best option is to keep your existing life insurance.  There is never any obligation or pressure with our life insurance service.  We'll show you the information you need in order to make an informed decision about life insurance.

If you do shop around for a new life insurance policy, NEVER let your existing life insurance coverage expire until the new coverage is effective. Return to Questions

 When will the policy begin?

The date that the life insurance goes into effect could be different from the date the life insurance company issues the policy. If you decide to purchase the policy, the life insurance becomes effective when you have accepted the policy and the home office has received all necessary documents and premium required and indicates that your life insurance is in effect. Return to Questions

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