Term Life Insurance Frequently Asked Questions

What is term life insurance?

Term life insurance protects you for a certain period of time, for example, 5,10, 15, 20, 30 or even 35 years.  Once the term of the policy is over, you can often renew the policy without providing proof of insurability, though often at a higher cost.  If you were to pass away during the term of the policy your beneficiaries would get the death benefit, income tax free.

How much life insurance do I need?

As a rule of thumb, you need about $100,000 in insurance for every $500 of monthly income required.  For example, if your household needs $3000 a month for expenses, you’d divide that by $500 to get 6.  So in this case you’d need six times $100,000 or $600,000 of coverage.  In addition to this, you should also consider the total of all outstanding debts plus the cost of college education for the affected children.  This amount should keep your family very well protected.

Should I buy a policy for my baby?

In our opinion, no.  Life insurance is meant to replace income that other people depend on.  Your baby has no income and doesn’t need her own life insurance.  She needs your life insurance if something happens to you.

Do stay-at-home mothers really need a policy on themselves?

Absolutely.  Although you are technically not replacing lost income, you will however need to replace the cost of losing the main caregiver.  This means you will probably need to provide for daycare or some other form of childcare, which is not inexpensive.

What all is involved in the life insurance application process?

After you have received your free quote that you are satisfied with, you will then start the application process.  This process normally takes anywhere from 4-8 weeks. 

First you will answer some brief questions regarding your health, job, and driving history.  Once this is received, one of our professional agents will contact you to verify the information.  During this call, they will also be filling out the insurance application for you over the phone.  This helps you save time since applications are generally very long and complicated.  The completed application will be sent to you via priority mail and will have the sections marked that need to either be completed or signed.  We will include a postage paid envelope for you to return to us.  At this point, we will order your free medical exam.  The professional medical examiner will schedule a time to come to your home or office to conduct the exam.  They will check your height, weight, blood pressure, and also collect a blood and urine sample.  These test results are forwarded to the insurance carrier for review along with your completed application.  During this underwriting stage, the insurance company reviews your test results, medical history, driving record, and may order a review of your medical records from your attending physician.  This particular part normally takes the longest.  Also during this stage you could be contacted by a case manager if they have any additional questions for you. 

Once the attending physicians statement is received and all other information is verified, the insurance company will approve or decline your application.  The policy will then be delivered to you with any other requirements necessary to get it in forced.  As long as you pay your premiums on time, your family will be protected.