- How much life insurance do I need?
A: The suggested amount of life insurance to buy will depend on a number of different factors. Talk to an insurance agent. He/she can help you evaluate your insurance needs and give you information about different types of policies. Determining how much coverage you need by getting important questions answered such as: How much of the family income do you provide? Does anyone else depend on you financially? How will your family pay final expenses and repay debts after your death? Based on the answers to these type questions and more, you can together intelligently decide how much coverage you need, for how long, and what you can afford to pay. You want to make sure that you buy enough life insurance to cover the financial effects of an unexpected or untimely death. - What type of life insurance should I buy?
A: It will depend on your individual circumstances and needs. You will need to decide if you want Permanent or Term life insurance. Term life insurance is commonly known as "Temporary" insurance because just as the name implies it only provides a death benefit for a specified number of years. On the other hand, “Permanent” life insurance doesn't end as long as you continue to pay your premiums. In addition to providing a death benefit, permanent life insurance can accumulate cash value, and then you have the ability to access cash that has accumulated, in the form of loans and/or withdraws after a certain period of time. Keep in mind, permanent life insurance will have more expensive premiums for the same death benefit coverage, then term life insurance. - Is permanent life or term life better?
A: It will depend on your individual circumstances. It will depend on what you are trying to accomplish and also how much you can afford to pay in premiums. There are two schools of thought. In my opinion, there is no right or wrong answer. Again it depends on your particular circumstances. Talk it over with your independent insurance agent to determine what you feel best fits your needs. - Will my life insurance have cash value, if I plan to cancel the policy or if I just take a loan from an existing policy?
A: That will depend on the type of life insurance policy you purchase. Term life insurance does not have cash value built it, which helps keep the premiums very low. On the other hand, many permanent life insurance policies (but not all), can (or already do have) cash value built into your specific policy. So be sure to ask and understand if your policy will have cash value built in. (Although if you feel cash value is not an important feature or determining factor of your life insurance policy that you desire and you still want a permanent life insurance policy, you can reduce your premiums by having the cash value portion stripped out by customizing a universal life permanent policy.) - Who should be my beneficiaries?
A: First you need to know that a beneficiary of a life insurance policy has to be an "insurable interest.” Someone having an insurable interest in you, means that they would experience financial loss and hardship should you die. Therefore, for someone to purchase an insurance policy on your life and be considered the beneficiary (making them beneficiary owner), they must be able to demonstrate an insurable interest. With regard to a life insurance policy, an insurable interest is based on a relationship whereby there is a common interest in another person continuing to live or a financial loss that would result at that person’s death. Therefore, in order to insure the life of an individual, an applicant for life insurance coverage must have a greater financial concern in the insured living than in them dying. For more on insurable interest info, click on this web link below to read another blog post I wrote.
https://mgildarinsurance.com/blog/life-insurance/life-insurance---can-anybod.html
Generally, your spouse (if married), your children, grandchildren, an aging parent, other blood relative, etc. would be some good examples for your beneficiary choices. You should also choose one or more contingent beneficiaries, if for some reason your beneficiary is not living when you pass. (Example: If you and your immediate family were all in accident together and there were no survivors.)
Important note: Keep in mind with children under the legal age (minors), their guardian may have control of the death benefit money until the child or children were of legal age, unless you create a trust in advance for them and name that trust as a beneficiary. - What is the insurance company’s financial rating?
A: Pick a well established insurance company with an “Excellent" rating! Check the insurance companies’ ratings for financial strength first before completing an application. You want your insurance company to be there when your family needs it the most! Some of big name companies that rate the insurance companies financial strength are: AM Best, S&P, Moody’s and Fitch! Keep in mind a rating scale from one rating company, may differ from another company’s rating scale. - Do I need to take a Medical Exam in order to buy life insurance?
A: To get the least expensive premiums for same amount of death benefit, generally traditional life insurance that requires a medical exam is the way to go. That is, if you are in good health and have lots of time to go through the insurance company’s approval process.
However, if you are either in a hurry and/or don’t want to have a medical exam, then Simplified Issue may be an option, if you are in relatively good health. Simply Issue generally doesn’t require a medical exam, but they will ask you medical questions about any medical conditions you may currently have or have had in the past. If your answers don’t fall within the guidelines of the insurance company’s requirements, you most likely will not be approved. Simplified Issue premiums are more expensive than traditional life insurance premiums with the same death benefit, due to more risk on the insurance company’s side.
There is yet another option that doesn’t require a medical exam (or even any medical questions for that matter). So even if you are in very poor health, you can still get approved! That type of life insurance is called Guaranteed Issue. However, Guaranteed Issue is the most expensive type of life insurance since there is an increased amount of risk the insurance company is taking on.
Note: Full death benefits on most Guaranteed issue don’t start until after two full years. If an insured were to pass before that full two year period, the beneficiary would just get the premiums paid in to that point, plus interest. - Will my medical conditions/history increase my premiums?
A: It all depends on what your medical conditions are, and your medical history. If you can get approved, yes many medical conditions can increase premiums. - Does it matter what type life insurance agent I use?
A: I highly recommend using an Independent Insurance Agent rather than a captive agent. Independent agents don't just use one main insurance company and possibly some of their affiliates for quotes, like a captive insurance agent from a single big insurance company does. Independent insurance agents can shop a very large number of insurance companies across the market at once for the very best quotes and are also able find specific insurance policies that are best suited for their clients. That way you can choose from a broad number of insurance companies and compare their quotes as well as financial strength all within a chart provided by an independent agent. - How should I choose an independent agent?
A. Check the agent’s reviews, testimonials, and/or recommendations. You should choose a trustworthy independent agent. Select an agent that will be there for you to answer your questions and also give you excellent customer service even after the sale.
Note: Life Insurance information can be confusing to many people. As an "independent licensed agent" I can explain things to you in simple terms so you feel comfortable making a decision. Then I can help you choose a life insurance policy, from many choices of different insurance companies, that you feel fits your needs. Plus if you choose to work with me you will have personalized service by a local agent that can shop premium quotes for you. If you would like my assistance to discuss and/or start the process of getting you insured please call me at 941-404-5334.