Life insurance policy frequently asked questions - FAQs
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
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
Will the agent ask questions about my health?
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
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.