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Why do I need life insurance?
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How much life insurance should I have?
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Do I really need individual life insurance if I have group life insurance?
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If I already have life insurance, should I purchase life insurance on my spouse?
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Should I purchase life insurance on my child?
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When should I review my current coverage?
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How does my health affect the amount I pay for life insurance?
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Why does the company need information about my health and is it safe to give that information?
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My financial professional told me I need quite a bit of life insurance; can I really get that much?
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Is it true that hobbies and activities I participate in are considered during underwriting?
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Should I even bother applying for life insurance if I know I have an existing medical condition?
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Why are you concerned with my medical condition when my doctor may not be?
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Will I have to take a medical exam and if so, what are some of the things I may be asked to do?
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How long does the underwriting process take?
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| Q. |
Why do I need life insurance?
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| A. |
Life insurance provides a death benefit, money that your beneficiary or beneficiaries can use for whatever purposes they choose, helping to:
- Pay your last expenses, which may include estate taxes and burial costs
- Replace your income and helping to maintain your family's standard of living
- Protect your family's home by enabling them to pay off the mortgage and other debts
- Pay others to do some of the tasks you do routinely, such as caring for an aging relative or a child, maintaining the yard or home, etc., or having the option to take time to do these things him- or herself
- Ensure a child can go to college
- Provide supplemental retirement income for your spouse or partner
- Provide funds to help settle an estate
- Pay expenses incurred to keep your small business in the family
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| Q. |
How much life insurance should I have?
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There's no single right answer. “Rules of thumb” can range anywhere from 2 to 10 times your annual gross salary—provided you have an income. But estimates provide only ballpark figures, which may be inappropriate for a particular family's needs and goals, especially if your family or spouse relies on you for more than just income.
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Do I really need individual life insurance if I have group life insurance?
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Participating in your group life insurance is a good idea because you will often be able to receive life insurance at a lower, group price. When deciding whether to buy insurance beyond your group coverage, consider these questions:
- Will you still have your group life insurance coverage if you leave your job?
- Does your existing group coverage provide enough insurance?
- If you need to apply for a new individual policy because you leave your job, are you prepared to pay higher premiums (premiums may be higher due to your age or due to health status)?
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| Q. |
If I already have life insurance, should I purchase life insurance on my spouse?
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If your spouse contributes to the family's annual income, then he or she should have adequate life insurance protection to replace that income in the event of his or her death. If your spouse does not earn an income, life insurance can still play an important role in helping to pay for valuable services he or she provides—for example, providing child care, elder care, or home maintenance.
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Should I purchase life insurance on my child?
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There are two reasons you may want to consider purchasing life insurance on, or more accurately, for your child*:
- You can purchase the life insurance at the lowest possible premium. If your child were to purchase the same amount of coverage as an adult, the annual cost would be much higher.
- You can ensure that he or she has life insurance protection. Statistically, a child is healthier and tends to get a better underwriting class than an adult. If the child develops health problems as an adult, he or she could become uninsurable and may not be able to obtain life insurance coverage.
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When should I review my current coverage?
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When you bought your life insurance policy, your situation may have been significantly different from what it is now. If something were to happen to you today, would your family have enough protection? If you have undergone any life-changing events, such as any of the following since you bought your policy, it's possible you may be underinsured.
- Purchased a home
- Had a child
- Married, divorced, or became widowed
- Changed jobs
- Started your own business
- Began caring for an elderly relative
- Took out a large loan
- Started a retirement or college fund
Your life insurance coverage should be reviewed annually.
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How does my health affect the amount I pay for life insurance?
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Underwriting is the evaluation of factors—including your height, weight, current health, medical history, family history, occupation, hobbies, driving record, and whether you have ever smoked or piloted a plane—that may affect your eligibility for life insurance at the time you apply. Through this evaluation, we can determine whether you are eligible and offer you a fair price for the risk we assume to provide you with coverage. Most people can qualify for insurance. The premium you pay is based on your overall health. If you are not in perfect health—and most people are not (only 30% of our policies are issued with our very best rates)—you can still get life insurance at an affordable price. Even individuals with health impairments such as coronary artery disease, cancer, diabetes, or a history of stroke may be eligible for insurance.
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Why does the company need information about my health and is it safe to give that information?
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Having a clear view of your medical history helps us determine how your health fits in with the general health of the rating category you fall into.
When you purchase insurance, you are placed in a group of people with similar risk characteristics. Not every person in the group will have the same life span but, overall, the group will have a fairly predictable life expectancy. This group, known as a rating class, gives us a basis to determine your premiums.
We realize that information we request is personal and sensitive. For this reason, the information we collect is kept confidential and shared with only those who must have this information to determine your eligibility for life insurance.
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| Q. |
My financial professional told me I need quite a bit of life insurance; can I really get that much?
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The amount of insurance we issue will depend on a number of factors such as your individual need for life insurance, your income and financial worth, the amount of life insurance you already have, the types of activities you engage in, and so on.
For this reason, we will ask how much income you earn, if you have income from sources other than your work such as investments, and your total family income or household income. Your financial worth (what you own and may owe) is also important information we may need from you. It is important to disclose all financial information fully so we can properly determine your eligibility for the amount of insurance you are asking for. In some cases, depending on the amount of insurance you are requesting, you may also be asked to provide actual records of your income and worth such as a copy of your tax return or bank statement.
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Is it true that hobbies and activities I participate in are considered during underwriting?
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The types of activities you participate in can reflect how much risk you are exposed to on a regular basis. While many activities present no unusual hazard, certain activities, such as flying a plane, scuba diving, driving carelessly or while intoxicated, and traveling to some areas of the world, present added risk and need to be evaluated. If you have a history of speeding tickets or frequent travel to certain areas, for example, the risk we assume to cover you is higher and, therefore, your premiums may be higher.
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Should I even bother applying for life insurance if I know I have an existing medical condition?
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Yes! Even individuals with health impairments like coronary artery disease, cancer, diabetes or strokes may be eligible for insurance.
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Why are you concerned with my medical condition when my doctor may not be?
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If you have a medical problem that requires no immediate attention, your physician may not be concerned and may convey that sentiment to you. When the medical condition becomes more severe or when complications develop, your doctor can respond by starting treatment or ordering further evaluation. However, when evaluating that same medical condition, insurance companies have only the narrow window of time during which underwriting takes place to make their assessment.
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Will I have to take a medical exam and if so, what are some of the things I may be asked to do?
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Based upon your age and the amount of life insurance you are applying for, an exam and/or additional medical tests may be required to help us make the most informed underwriting decision. These tests will provide us with the information we need to fairly assess your eligibility for life insurance.
The medical exam is conducted at our expense, by either a paramedical examiner at your home or business or by a doctor at a physician's office, depending on your age and the amount of coverage you've applied for. During the exam, the examiner will check and record your blood pressure, pulse, height and weight. You may also be asked to:
- Provide a urine sample. The urinalysis will screen for indications of things such as nicotine and certain drugs, elevated sugar levels, and signs of kidney disease.
- Take a blood test. Blood tests screen for abnormalities that might be indicative of a variety of medical conditions or to assess the current status of known medical conditions such as kidney or liver disorders, cholesterol levels, or diabetes.
- Take an electrocardiogram (ECG) to screen for irregularities such as an irregular heart beat or rhythm or a decreased supply of blood and oxygen to the heart.
- Have a chest X-ray taken to check for any abnormalities of the heart and lungs
- Provide an oral fluid sample. The analysis will screen for such things as nicotine and certain drugs.
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How long does the underwriting process take?
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If we do not receive all information necessary to complete the underwriting process within 60 days of the initial request for coverage, we will close your file. Once we receive the outstanding information, we will resume the process.
When the underwriting process is complete, we will either approve you for coverage (with or without changes or exclusions) or decline coverage. If you're approved, your policy will be issued and delivered by your licensed financial professional.
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