How much life insurance coverage do I need?
The amount of life insurance one needs is variable and based on multiple factors. Generally speaking, the earlier you are in your career, and the younger your dependents are, the more life insurance you will need. On average, people purchase a life insurance policy that is 10-15x's their annual salary/bonus. You may also want to consider what debts you may owe, such as a mortgage, student loans, car loans, etc. If you need guidance with determining this amount, we would be more than happy to help you. Also, feel free to visit our term life insurance calculator feature.
How long of a term should I select?
That depends again on how early you are in your career, the age of your dependents, the length until your retirement. Did I mention your pocketbook as well?
How long does the application process take?
The insurance industry is changing. Before, it took on average between 4-8 weeks to process an application. Now, if you are a healthy individual that does not take medications on a daily basis, and you have a clear driving record, and a good family health history, you could be approved in as few as 2 days with no formal medical exam. However, if the amount of insurance applied for is over a certain amount (for ex $500,000) then a fully underwritten application would be necessary. This can close (be approved or declined) in as little as 2 weeks.
What does the quoting process involve?
We want to make sure that we are quoting you as accurately as possible so we will do a thorough questionnaire with you. The more detailed information we have, the better. It would be a disservice to our clients to simply quote them the lowest price without first understanding their overall health profile. Also, it is not fun when you get quoted one price, and then after applying the insurance company offers you a higher price. We do our best to avoid that scenario from happening, but sometimes the carriers uncover things that we can not.
After you agree on the quote, we can either do a min application right then or depending on the carrier chosen, a specialist from the life insurance company will call you to schedule your telephone interview and your paramed exam. A licensed nurse or paramedic will come to your home and ask you the necessary health related questions in order to complete the Part 2 of the application. They will also perform a mini physical for free, which can include measurements of your height, weight, and blood pressure. They will also collect a blood and urine sample. For older applicants, and larger face amounts, they could perform an EKG, or a cognitive function test. Don't let this intimidate you-it is a usual and customary practice and based on your age and face amount that you are requesting, there could be different requirements. Once the exam is performed, the lab will send your results to the insurance carrier. The underwriter will assess your case and determine if he needs additional information, such as an attending physicians statement or APS. This tends to delay the process, but it is not always ordered. After receiving all of the information, the underwriter will make an offer-either a flat out decline, or an approval. Based on his findings, he will price the policy accordingly. For example, about 80% of applications are quoted as preferred plus, but only 50% of those come back approved as applied for. The bottom line is this-be honest and forthcoming with your health information, this makes the whole process quicker and more enjoyable for all parties.
Do I need to take a medical exam?
Not always. This depends on the insurance company you are applying with, the face amount that you are applying for, and if you pass certain health related questions. If you are in a rush to get coverage, and you don't mind paying more for the convenience, then you can always talk with us about our lightening fast non- medical exam products.
Can I buy term life insurance if I am not a US citizen?
In most cases you can apply for and purchase a policy if you are not a US citizen. You will need to show some type of permanent status however, such as a green card.
Does a stay at home parent need life insurance?
Absolutely. Just because you are not earning a paycheck, that does not mean the duties you are performing daily is not valuable. Imagine having to pay someone for child care, transportation, meals,all of the jobs that would need filled in your absence.
Do I need to buy a policy for my child or baby?
We do not recommend purchasing an additional policy for your child. Life insurance is meant to replace lost income. If you want a cushion if you ever had to suffer the loss of losing a child and needed to bury them, then you can always ask to purchase a "child rider." These are sold without a medical exam as a rider to the parents policy. You can normally purchase them in increments of $10,000 for an additional annual cost to your policy. This would cover all of your children living at home with the parents.
But I have a policy through my work. Do I still need an individual policy?
That is wonderful that your employer offers life insurance coverage, but can you take it with you should you leave or get laid off? Normally that answer is NO. Also, most employers offer coverage that is 1-2 times your salary-you will more than likely need more than that amount to be fully protected. One more thing to consider is that this policy is a group policy and is at group rates. If you are in great health than it would be to your advantage to get a quote and see how much money you could save by owning your own stand alone policy. The same applies to disability coverage.
Can I change my beneficiary(s) after the policy has been issued?
Yes, you can change the beneficiaries after the policy has been issued. It is just a matter of filling out a special form and getting it over to the carrier.
Why is it cheaper to pay annually?
It is typically anywhere between 5-10% cheaper to pay your premium once a year versus paying it monthly. This is due to the hassle of setting up the auto-draft, collecting on delinquent policies, etc. It is wise to pay annually-you just have to budget for it.