Frequently Asked Questions About Life Insurance


What if I become disabled and can't pay the premiums?

Provisions or "riders" that provide additional benefits can be added to a policy. One such rider us a "waiver of premium for disability." With this rider, if you become totally disabled for a specified period of time, you don't have to pay premiums for the duration of the disability.

What happens if I fail to make the required 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 no interest charged. After that, the company -- with your authorization -- can draw from a permanent policy's cash value to keep that policy in force. In some flexible or universal life policies, premiums may be reduced or skipped as long as sufficient cash values remain in the policy. However, this will result in lower cash values and a shortened coverage period.

Are other riders available?

Yes. An "accidental death benefit," for example, pays an additional benefit in case of death resulting from an accident. Some companies provide "accelerated benefits," also known as "living benefits." This rider allows you, under certain circumstances, to receive the proceeds of your life insurance policy before you die. Such circumstances include terminal or catastrophic illness, the need for long-term care, or confinement to a nursing home. Ask your agent for information about these and other policy riders.
When will the policy be in effect?
The date that insurance goes into effect could be different from the date the company issues the policy. If you decide to purchase the policy, always check precisely when the insurance becomes effective.
What can I expect the agent to do for me?
The agent should be willing and able to explain various policies and other insurance-related matters. You should feel satisfied that the agent is listening to you and looking for ways to find you the right type and amount of insurance at an affordable price. If you are not comfortable with the agent, or you aren't convinced he or she is providing the service you want, find another agent.

Will the agent ask questions about my health?

Be prepared at the initial meeting to answer questions about your health. For example, you can expect questions about your age, medical condition, medical history, family history, and personal habits. When you apply for life insurance, you may also be asked to have a medical exam. Often, a licensed medical professional will make a personal visit.

Always answer questions about medical history and health carefully and truthfully; this information helps a company establish a premium for your coverage based on your risk. For instance, you may pay a lower premium if you don't smoke. On the other hand, if you have a chronic illness, you may charged a higher premium.

How do I know if a life insurance policy is right for me?

The agent will recommend a life insurance policy that he or she thinks will meet your needs. Look at the recommended policy with care to be sure it fits your personal goals. Often, an agent will provide a "policy illustration" that shows how the policy will work.

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