FAQs

Why do I need life insurance?

The main purpose of life insurance is to provide cash to your family after you die. The money your dependents will receive (the "death benefit") is an important financial resource: It can help pay the mortgage, run the household, end ensure that your dependents aren't burdened with debt. The proceeds from a life insurance policy could mean that they won't have to sell assets to pay outstanding bills or taxes. What's more, there is no federal income tax on life insurance benefits.

Where do I Begin?

Start by evaluating your family's needs. Gather all your personal financial information and estimate what your family will need after you're gone. Include ongoing expenses (such as day care, tuition or retirement) and immediate expenses at the time of death (like medical bills, burial costs, and estate taxes). Your family also may need funds to help them readjust... perhaps to finance a move, or pay expenses while job hunting. Remember, life insurance provides financial protection. If protection is not your primary goal, you should consider other financial products.

How much life insurance will I need to purchase?

While there's no substitute for evaluating needs, one rule of thumb is to buy life insurance equal to five to seven times your annual gross income

Where do I purchase life insurance?

After you have though about your financial needs and become familiar with the basic types of life insurance, it's time to choose a company and agent.  While some consumers prefer to buy policies directly from an insurance company, most people buy life insurance through agents or brokers.

Will the broker ask questions about my health?

Be prepared at the initial meeting to answer questions about your health. For example, you can expect questions about your age, medical condition, medical history, family history, and personal habits. When you apply for life insurance, you may also be asked to have a medical examination. Often, a licensed medical professional will make a personal visit.

Always answer questions about medical history and health carefully and truthfully; this information helps a company establish a premium for your coverage based on your risk. For instance, you may pay a lower premium if you don't smoke. On the other hand, if you have a chronic illness, you maybe charged a higher premium.

Also, in the event of a claim, accurate and truthful answers enable your beneficiary to receive prompt payment. Inaccurate or untruthful answers, however, may cause delay or even denial of a claim

How do I know if a life insurance policy is right for me?

The broker will recommend a life insurance policy that he or she thinks will meet your needs. Look at the recommended policy with care to be sure it fits your personal goals. Often, an agent will provide a "policy illustration" that shows how the policy will work.

Carefully study your agent's recommendation and ask for a point-by-point explanation. Make sure the agent explains items you don't understand. Because your policy is a legal document, it is important that you know what it provides.

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