Shopping for a life insurance policy can often bring on many questions. Although needs and plans differ from person-to-person, here are answers to some of the most common life insurance questions.
What is life insurance?
Life insurance is an affordable way to protect your family financially in the event you’re not there to take care of them. It can help with things like paying the mortgage, college tuition, final expenses and more.
What are the different types of life insurance?
Permanent life insurance represents a category of several types of life insurance without a pre-set expiration date. When you purchase permanent life insurance, you are permanently covered, regardless of how long you live and the coverage does not expire as long as premiums are paid.
Whole life insurance is a type of permanent life insurance and provides a set amount of coverage (decided by you) for as long as you live, for which you pay monthly premiums. In addition to the death benefit, whole life insurance also includes a savings component, also known as the cash value.
Universal life insurance is another type of permanent life insurance which provides a death benefit to one or more people when you pass away. The value accrues and earns interest as you pay your monthly premiums, leading to the opportunity to also act as a savings account.
Final expense insurance also known as burial insurance, helps cover end-of-life costs, including funeral expenses, credit card debt, medical bills and any other debt you don’t want to pass on to those closest to you. Final expense does not require a medical exam, making it an appealing option for both seniors and individuals with health complications.
Who needs life insurance?
If you have loved ones that depend on you financially, you probably need life insurance. Things like mortgage payments, credit card debt and other expenses can fall on your loved ones after you’re gone and life insurance is an affordable way to make sure your family is financially secure should something happen to you.
What type of life insurance is best for me?
The right life insurance policy looks different for everyone, but it helps by starting with the question: term life or whole life? Both options have advantages and considerations, so before making a decision, it’s best to understand the differences between the two. Learn more about the differences between term life insurance and whole life insurance.
Is life insurance through my employer coverage?
Group life insurance is a popular benefit for employers to offer. And while group life insurance is often easier to qualify for than an individual policy, it doesn’t always provide the amount of coverage you would need. Additionally, you’ll lose the coverage if/when you stop working at the company.
What type of life insurance coverage do I need?
Life insurance coverage needs vary from person-to-person, but there are certain factors to consider to determine how much you need.. Factors such as anticipated final expenses, living expenses for your surviving family members, outstanding loans, and mortgage payments can be a starting point to help you determine what you want to get out of your coverage.
How much does life insurance cost?
The cost of life insurance depends on the amount of financial security you want to leave to your beneficiaries. The cost also depends on several factors, including the type of policy and your age and health at the time of purchase.
How is the cost of life insurance determined?
The cost of life insurance is determined during the underwriting process, which uses several factors to determine your monthly premium.
- Type of policy: Term life insurance is typically more affordable as you’re only paying for as long as you need it. On the other hand, while whole life tends to be more expensive, it provides coverage for as long as you live.
- Amount of coverage: The longer your term or greater your life insurance coverage, the more expensive your premium is likely to be.
- Your age and gender: Your rate is set when you sign your policy and it shouldn’t change during the duration, but the cost of purchasing life insurance increases as you age. Additionally, part of the underwriting process includes evaluating how long you might live, and since women tend to live longer than men, women often receive lower life insurance rates.
- Your health and lifestyle: For both term and permanent life insurance, you have to complete a basic medical exam as part of the application process. Some factors that might result in higher premiums include high blood pressure, high cholesterol, HIV/AIDS and hepatitis, hypoglycemia, chronic illness, nicotine use or recreational drug use. Additionally, if you participate in extreme sports or high-risk hobbies, you’re considered a bigger risk to the insurance company and might see a higher premium for both term and permanent policies.
Why should I buy life insurance?
Life insurance is a great way to make sure your loved ones are financially secure should the unexpected happen. It’s a safety net so your family can continue living life in the event you are unable to financially support them. Life insurance can give you and your family peace of mind.
What are some tips for buying life insurance?
Before you buy life insurance, consider how much life insurance you will need to replace your income now and in the future, such as education, family events, retirement savings, etc. Additionally, think about who depends on your income today—from spouses to children, business partners to loan co-signers, it’s important to consider everyone who can benefit from your smart decision to buy life insurance.
Can I get a free life insurance quote?
Getting a free life insurance quote is as easy as connecting with SelectQuote. We’ll ask you for some personal information and get to know more about your lifestyle to make sure we’re finding the kind of coverage that’s right for you. Our quick and proven process will help you find the best available results for your health, lifestyle and budget.
Why should I let SelectQuote shop life insurance policies for me?
At SelectQuote, we’ll get to know your situation, learn more about the coverage you’re looking for, and provide unbiased life insurance quotes from some of the most trusted companies in just minutes. We can also answer any questions you have, match you with the right life insurance company for your lifestyle or health condition, and find opportunities to try and save you money.