Life Insurance FAQs 

What is life insurance?
Life insurance is a contract between you and an insurance company where you pay premiums in exchange for a death benefit to be paid out to your beneficiaries upon your death. It provides financial protection to your loved ones in case of your untimely death.​

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What are the different types of life insurance?
The two main types of life insurance are term life insurance and permanent life insurance (which includes whole life, universal life, and variable life insurance).

• Term Life Insurance: Provides coverage for a set period (e.g., 10, 20, or 30 years). It is typically more affordable but doesn't accumulate cash value.

• Permanent Life Insurance: Provides lifelong coverage and may accumulate a cash value over time, which you can borrow against or use to pay premiums.

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How much life insurance coverage do I need?
The amount of life insurance you need depends on several factors such as your income, debts, dependents, and financial goals. A common rule of thumb is to have coverage that is 10-15 times your annual income, but it’s best to work with a financial advisor to determine the right amount for your situation.

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What is the difference between term and permanent life insurance?

• Term Life Insurance: Covers you for a set period and is generally more affordable, but it does not accumulate cash value. Once the term ends, the policy expires.

• Permanent Life Insurance: Provides lifelong coverage and typically builds cash value that grows over time. It's more expensive than term insurance but offers more flexibility and long-term financial benefits.

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What does "cash value" mean in life insurance?
Cash value is the savings component of certain types of permanent life insurance policies. A portion of your premium goes into a cash value account, which grows over time. You can borrow against it, withdraw from it, or use it to pay premiums.

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What is the difference between whole life and universal life insurance?

• Whole Life Insurance: Offers fixed premiums, a guaranteed death benefit, and a guaranteed cash value growth.

• Universal Life Insurance: Offers more flexibility, allowing you to adjust your premium payments and death benefit. The cash value grows based on current interest rates and may fluctuate.

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How are life insurance premiums determined?
Life insurance premiums are based on several factors, including your age, health, lifestyle (e.g., whether you smoke), occupation, the type of policy, the amount of coverage, and your medical history. The younger and healthier you are, the lower your premiums are likely to be.

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How long does it take for a life insurance policy to pay out?
Typically, life insurance payouts take a few weeks to a few months to process. The insurer will need to verify the claim, which includes providing a death certificate and any necessary documents. The timeline can vary depending on the circumstances.

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Can I change my life insurance policy after it’s been issued?
Yes, you can usually make changes to your life insurance policy, such as adjusting your coverage amount, adding or removing riders (extra benefits), or changing beneficiaries. For permanent policies, you may also have the option to change the type of policy (e.g., from whole life to universal life).

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What are life insurance riders?
Riders are optional add-ons to a life insurance policy that provide additional coverage or benefits. Common riders include:

• Accelerated death benefit: Allows you to access part of the death benefit if you're diagnosed with a terminal illness.

• Waiver of premium: Waives premiums if you become disabled.

• Child rider: Provides coverage for your children.

Can I get life insurance if I have pre-existing health conditions?
Yes, it is possible to get life insurance with pre-existing conditions, though it may affect your premiums. Some insurers may offer policies with higher rates or exclusions related to the pre-existing condition. In some cases, you may be able to qualify for a "guaranteed issue" policy, which doesn’t require a medical exam.

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What happens if I stop paying my life insurance premiums?
If you stop paying premiums on a term life insurance policy, the coverage will lapse, and you’ll no longer be insured. For permanent policies, the insurer may use the cash value to cover premiums temporarily, but if the cash value is exhausted, the policy may lapse.

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How can I ensure my life insurance policy is properly managed?
It’s important to review your life insurance policy regularly to ensure it meets your evolving needs. Changes in your life, such as marriage, having children, or purchasing a home, may require adjusting your coverage. Additionally, ensure your beneficiaries are up-to-date and that your premiums are being paid on time. Schedule a review with our team to provide you and your love ones assurance.

What is the "contestability period" in life insurance?
The contestability period is usually the first two years of a life insurance policy. During this period, the insurer can investigate and deny a claim if they discover that you provided false information on your application or omitted relevant facts.

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Are life insurance premiums tax-deductible?
No, life insurance premiums are generally not tax-deductible. However, the death benefit paid to your beneficiaries is typically tax-free, making it an attractive way to provide for your loved ones. (Consult with a tax specialist for advice)

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How do I choose the right life insurance policy for me?
The right policy depends on your financial goals, family situation, and budget. If you need temporary coverage to protect dependents during specific years (e.g., until children are grown), term life insurance may be the best option. If you want lifelong coverage and the potential to build cash value, permanent life insurance might be a better choice. Schedule a consultation with one of our licensed insurance agents to determine which option best suits your needs.

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What are the benefits of life insurance for my family?
Life insurance provides your family with financial security in the event of your death. It can help cover living expenses, pay off debts like a mortgage or student loans, and provide funds for future needs like college education. It ensures your loved ones won’t face financial hardship during an emotionally challenging time.

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Can I get life insurance if I’m older?
Yes, you can still get life insurance as you get older. Some insurers offer policies designed for seniors, such as guaranteed issue life insurance or final expense insurance, which provide coverage with minimal underwriting.

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