Why get life insurance? Is it worth it?

The simple and most obvious reason for life insurance is to protect the people you love. In addition to the dramatic psycholgical effect, a death in the family can also put those who are left behind in an awkward financial situation. Life insurance eliminates or at least helps to relieve this problem. Month to month it might feel like a waste of money, but if something unfortunate occurs, you or your family will be glad they had a policy.


How much insurance do I need?

Traditionally the rule among experts was to recommend anywhere from 5 to 10 times the person's annual income. This, however, does not take in to consideration the amount of time that a dependent or widow might need to rely on insurance payments.


Is my "free quote" really free?

Yes. Nowadays you will see numerous web sites (this one included) offering free insurance quotes, and 99 percent of the time these services turn out to be absolutely free, with no obligation whatsoever. Don't worry, you can't be billed without knowing it ahead of time.


What is Term Life Insurance?

Term life insurance is life insurance coverage at a guaranteed rate for a specified period of time. (Example: a 30 year level term would guarantee a level premium for 30 years based on a specified death benefit). Term life insurance is usually the least expensive form of life coverage.


What is Universal Life Insurance?

Universal life insurance is a flexible premium policy under which the policy owner may adjust the death benefit from time to time and vary the amount or timing of premium payments given specified limitations. Premiums are credited to a policy account from which mortality charges are deducted and to which interest is credited based on short term interest rates. This crediting usually allows some cash value build up in the policy.


What is Whole Life Insurance?

Whole life insurance is a permanent type of life insurance coverage that can provide life-time protection at a level premium. Premiums must generally be paid as long as the policy is in force.


What does the application process involve?

Once you select an insurance company and a rate, you then request an application by filling out an application request form. Soon after that an agent will contact you and set up a convenient appointment for a no-charge physical. The physical can take place in your home or office and is performed by a medical professional. Upon completion of the application and physical, the information is then submitted to the underwriting insurance company. Four to eight weeks are required for the life insurance company to underwrite and issue the policy.


If I get sick, can my policy be cancelled?

No. As long as you have continued to pay your premium, an insurance company cannot cancel your policy due to a change in health. The only exception is if the information you provided on the application was misleading or innacurate.


What determines if I receive preferred or standard rates?

In order to receive preferred rates you must be in good general health and must be a non-smoker. Limits based on height, weight, cholesterol and blood pressure vary from company to company, but in general you must not have any health issues. Some companies also take family history into account, as well as prior alcoholism or drug use.