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Standard/Whole Life Insurance Quotes Policy Questions and Answers
It
is expected that during the life insurance buying process, you will
have many questions. You should feel free to ask your agent for
answers to any of your questions.
During the purchasing process, it is normal to have
many questions. Below you will find answers to some of your questions.
For more information, obtain an insurance
quote using our online life insurance form and you will receive
a response within one to two days from a licensed insurance professional
in your area. Get your FREE life insurance quote
TODAY! (For the online form, click
here).
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Your Answers:
How much life
insurance will I need?
If you're a the breadwinner for your family, you need life insurance! To determine how much you need
to replace your lost income, deduct the total income that would be lost
upon your death from the sum required for your family's financial well
being. Include particular circumstances, such as whether you want insurance for other
purposes like for a child's education. The solution to your needs
may be a combination of several insurance policies, and the combination
may change as your situation changes.
The differences between term and whole life insurance?
Whole life insurance (also known as "permanent" insurance),
is the most purchased type of insurance-- it will keep in force for as
long as you live. The face amount and the premium (yearly payment totals)
are fixed. The policy's cash value grows at a set rate specified in
the whole life insurance policy and can be used as collateral to borrow
against. While whole life insurance is usually recommended as a base
insurance policy, term insurance is good for people who need coverage
for short periods of time. Younger families who need large amounts
of protection for one year, five years, or more may benefit from a term insurance policy. The premiums are lower
at first with younger ages and will increase as you age and renew your
policies. Benefits are paid only if death occurs during the period covered.
If you stop paying premiums, the insurance stops. Term policies usually
have no cash value and no residual rights if the policy is cancelled.
What are the
three types of permanent insurance?
Whole
life, universal, and variable life are all permanent insurance policies and can
provide lifetime protection as well as build a cash value. The cash
value for universal life is linked to interest rates, and the cash value
of variable life is linked to invested options. The cash value of universal
and variable policies is not guaranteed, although some policies set
a minimum death benefit.
Should I replace a policy?
Be careful not to hurt yourself or your family financial security
with this type of decision. Please consider the following:
- With a new policy
comes a newer premium-- one that will more than likely be higher due to the
cost of living increases, your age, and health status.
- If your health
status has changed over the years, you rates will be higher with a new
life insurance policy.
- If you have gained
a cash value with one policy, stopping this policy and restarting a
newer policy will more than likely affect the cash value and its benefits.
What should I consider in choosing my life insurance beneficiaries?
- Always name a second
beneficiary, just in case you outlive your first beneficiary.
- Select a specific
beneficiary, rather than having the proceeds of your life insurance
paid to a general fund. This will ensure that your life insurance benefits
will be dispensed to your family quickly. If it is payable to your estate,
however, it will have to go through probate with the rest of your assets.
- Be very specific
in wording beneficiary designations. Saying "wife of the insured"
could result in an ex-spouse getting the proceeds. Naming specific children
may exclude those born later. If your child dies before you, do you
want the proceeds to go to that child's children? Changing the beneficiary
designation is easy, but you have to remember to do it. Due to the various
issues involved, an agent can be an excellent source of information
to help you properly set up your beneficiary designation.
What happens if I fail to make my life insurance premium payments?
If you miss a premium payment, you typically have a 30 or 31 day grace
period during which you can pay the premium with penalties. After that,
each company can draw from a permanent policy's cash value to keep that
policy in force. In some flexible-premium policies, premiums may be
reduced or skipped as long as sufficient cash values remain in the policy.
Can an insurance company use medical tests to disqualify me for insurance?
Your health status is important to an insurance company. These
tests can help establish your insurance premiums and eligibility. Certain
serious or
incurable conditions present an enormous risk that an insurer simply
will not take on.
When will the policy be in effect?
When you purchase a life insurance policy, always check precisely
when the insurance becomes active. The date that insurance goes into
effect could be different from the date the company issues the policy.
So safeguard your
family's financial security! Get your
FREE life insurance quote TODAY! (For
the online form, click here).
Use our on-line life insurance form and you will receive a response
within one to two days from a licensed insurance professional in your
area. (For our online form, click
here).
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