Q. My company provides group life insurance. Why do I need more?
You should take advantage of employer-sponsored group life insurance, but don't rely solely on it. There are several disadvantages to relying on group insurance alone. The amount of coverage offered is usually not sufficient enough to cover your needs. If your job situation changes, you might lose your coverage. Coverage may end when you retire or reach a specific age, losing your insurance when you need it the most. Your options are limited. Group coverage is not tailored to your individual situation.
For these reasons, you should get an individual life insurance policy in addition to the group life your employer offers. An individual policy will stay with you and can be personalized to meet your specific needs. Most importantly, it will fit the purpose for which you purchased it for, to ensure your family continues to have financial security in the event you are no longer able to take care of them.
Q. Is the Individual Life Insurance program also available to my family?
Yes. Anyone in your family who would like to purchase individual life insurance may use this program for added piece of mind. Individual underwriting will apply for each applicant.
Q. How much life insurance do I need?
There are many factors to consider when choosing how much life insurance you need. The amount of coverage needed is different for everyone’s unique circumstances. A life insurance calculator can help factor in the right financial information about you and your family to provide a more personalized recommendation.
Q. What type of policy should I get, term or permanent?
Term life acts as a short-term financial safety net. Term life is fairly straightforward and less expensive than permanent polices. You purchase coverage for a specified amount of time, usually 10-30 years. Once the term expires, you will have to get a new policy to continue coverage. You may also convert it to a permanent policy. It may be appropriate for temporary needs like:
- Home mortgage
- Outstanding debt
- Educational expenses
Permanent life insurance offers a level premium for a coverage amount you choose and is typically more expensive than term insurance. It provides lifetime coverage, provided premiums are paid and the coverage remains in force, and builds cash value. It's best for lifelong needs like:
- Loved one's financial needs
- Final expenses
- Estate planning
- Contributions to charity
- Business legacy
- Access to accumulated cash value
Q. Do I have to take a medical exam to get life insurance and how should I prepare for it?
Yes. A paramed exam is an exam performed by a medical professional to gather pertinent data about your current medical status and medical history. This information is used during the underwriting process to determine your rate class and pricing of the policy. They may take your measurements, blood pressure, and can include a blood draw and urine sample. The exam can be done anywhere and can last from 15-60 minutes depending on the required services.
You will be asked to provide the names and dosages of current medications, and provide names, addresses and phone numbers of any doctors or clinics visited in the last five years. Be prepared to list any medical conditions or diagnoses including the date diagnosed, treatment, result of treatment, and treating physician information. Also, have any application paperwork that was sent to you available and ready for the examiner and provide a photo ID.
Remember, this exam may be a factor to determine how much you pay for insurance. Take good care of yourself at least 24 hours prior to your appointment. Limit salt and high-cholesterol foods 24 hours prior to the examination, and your caffeine and nicotine intake to one hour prior to your appointment. Drink plenty of water and make sure to get a good night of sleep.
Q. What are the steps to obtain life insurance and how long does it take?
Chose the amount and type of coverage and complete a short online application.
You will be contacted by the insurance carrier to schedule an interview and exam. An application will be sent to you to review and sign.
An underwriter will review your application and exam results and determine if the policy is approved or if any additional information is needed. Once underwriting is complete, the carrier will extend you an offer for insurance.
Sign for the policy and make your premium payment and coverage will be in effect.
For healthy individuals who qualify for accelerated underwriting, you can get your policy in as little as 1-2 weeks. For long form cases and cases requiring special underwriting the process can take up to 6-8 weeks on average.
Q. What should I consider when naming my beneficiaries and am I allowed to change them?
Who you name as a beneficiary is unique to your own circumstances. You’ll want to think about who would be financially impacted if you were no longer living.
You don’t necessarily need to choose one beneficiary. You can choose multiple beneficiaries, which you can designate a percentage of the death benefit they would receive if you were to die. Of course, the more beneficiaries you name, the less money would each individual would receive. In general, most people name one or two primary beneficiaries, and one or two contingent beneficiaries to ensure that their bases are covered. For example, if you’re married with or without kids, naming a spouse as a primary beneficiary is the go-to for most people.
You may change your beneficiary’s as many times as you need.
Q. How do I submit premium payment, can I pay online?
The initial premium is required to place your coverage inforce. Premium can be paid monthly, quarterly, semi-annually, and annually. You can choose to have premium drafted from your checking account (mandatory for monthly payment option) or you can be billed and send in the premium payment directly to the carrier. Most insurance carriers will allow you to make payments online by registering on their site.