Life insurance can be a tough topic to learn about because no one really wants
to talk about dying. Below we answer 10 questions that people generally want to know
but don't want to ask.
1. Do I have life insurance through my employer already?
Some employers offer life insurance that you would have signed up for when you were hired. Usually, the coverage offered through your employer is inadequate. Even if your company offers great life insurance, you will lose it when you don’t work there anymore. If going through your employer is the only kind of coverage that you’re going to have for yourself at this time than certainly do not forgo it. It is better to have it than to go without.
2. Are medical exams required for me to get a life insurance policy?
Medical exams are a part of the underwriting process.
There are a few policies out there that do not require a medical exam but they generally have higher prices. Allstate offers no medical exam life insurance. Click here for more info: no-medical-exam life insurance policies
3. Why am I taking this medical exam?
The medical exam will determine someone’s health classification which will determine how much the premiums are.
Classification varies but there are classifications that most companies go by.
Preferred Plus, Preferred, Standard Plus, Standard, Substandard and Smoker. The results of your medical exam depend on a number of health and lifestyle factors in your life. The exam is similar to a basic physical.
Generally, this is what you can expect in the exam:
Measurement of your weight and height
Measurement of your blood pressure and pulse
Blood work (to check things such as cholesterol, glucose, protein, and HIV)
Urinalysis (to check things such as HIV, protein, glucose, creatinine, and cocaine)
4. Can I go to my own doctor for the exam?
Insurers do not want potentially bias third parties to give the exam. The good news is that the insurance company will pay for the exam. The technician will typically come to your house and the insurance company is not who is testing you. Generally, a third party will be the ones that test you.
5. Am I supposed to lose weight before I take a life insurance exam?
The insurance company is looking for your BMI. A healthy BMI will only help qualify you for the highest or best classification and therefore lower premiums. However, Insurers require to know if your weight has fluctuated more than 10 pounds within the last year. They are looking for the most accurate representation of your health.
6. What’s an underwriter?
An underwriter works for the insurance carrier and figures out how risky you are to ensure. They look at your exam results and medical records to help them conclude what classification you belong in. The underwriter will even look at your vehicle reports. Click here if you’d like to read more: a guide to the underwriting process
7. What happens if I lie to the underwriter and they find out?
Here is what probably would happen if deception is discovered:
-All of the quotes you have been using will be wrong and you will be offered a higher premium.
-You will get denied coverage or your policy canceled.
-Your death benefit will not get paid out.
8. What’s a death benefit?
The death benefit is the amount that is paid out when a life insurance claim is filed. The death benefit is paid to the beneficiary which the owner of the policy determined before the insured is deceased.
9. What is term life insurance?
Term insurance is a policy that covers you for a fixed period of time.
It is basic and inexpensive. Term insurance is good for a specific period of time. If you die during your term period, your beneficiary will receive the death benefit.
Regular Permanent life insurance, on the other hand, covers you permanently.
10. Which is better — term life insurance or permanent life insurance?
I like how policy genius answers this question:
We recommend term life insurance. Unless you’re super-rich, have a complicated estate situation or are closing in on retirement, it’s almost certainly better for you. That’s because the aim of life insurance is to cover your family during the years you’re working to provide for them. (They can take over from there. At least theoretically.) Plus, permanent life insurance is a lot more expensive. Having said all that, you can find more on term vs. permanent life insurance here.
by Jeanine Skowronski