LIFE INSURANCE FAQ
Life Insurance Frequently Asked Questions
The Hinerman Group knows how frustrating and confusing shopping for Term Life Insurance can be. When you add in complications and life events it can feel impossible. The Hinerman Group is here to walk you through every step of the term life insurance process and ensure that you get the rates and policy information you deserve.
Do I have to pay a full year at a time?
The quick answer is NO. You can choose to pay annually, semi annually, quarterly or monthly, monthly being done by automatic bank draft. Annually is the least expensive, but the most important choice is what works with your budget.
What does it cost to apply for life insurance?
The answer is nothing. Any company or agency that requires money with the application is simply using a psychological ploy to make you feel more committed to them than you need to be. Don’t pay for anything until you have a policy in your hand and you are sure it’s what you want to put in force.
How do I know you represent good companies?
We only quote and illustrate companies that are A Excellent to A++ Superior rated by AM Best. While we represent many companies you have probably heard of such as Prudential Financial, we may quote companies that you’ve never heard of that are equally or higher rated than Prudential. They have simply chosen to put their money into low rates versus advertising.
What does “subject to full underwriting” mean?
When we give you a quote, it is accurate based on the information you have provided. Full underwriting is the next step and includes an examination (at no cost to you) and a review of your medical records. Full underwriting gives a company the peace of mind to be able to offer a low rate because they’ve seen the whole picture.
Do I need to take an exam?
No! There are companies that will issue policies without exams. Some will issue up to $2.5 million without an exam. It’s worth noting that even though you can skip the exam, they will still retain the right to review your medical records and today they have access to databases that provide information even you may have forgotten. That said, if you are exceptionally healthy and want it quick and easy, prices can be comparable to fully underwritten policies.
Is there a waiting period before life insurance becomes effective?
The answer we use around the office is “no, as long as you tell the truth and don’t do yourself in”. Every policy has a 2 year suicide and contestability period. During the first two years the company doesn’t have to pay if the death is due to suicide or due to something that was misrepresented on the application. If you are completely honest on the application and don’t do yourself in, the policy is fully in force from the date the first premium is paid until you quit paying premiums.
Is whole life better than term?
No, it isn’t. One isn’t better than the other because permanent insurance and term insurance meet different needs. Also, today there are less expensive ways to meet those permanent needs than whole life insurance. Keep in mind though that upwards of 95% of all life insurance needs can be successfully covered by term insurance.
What if I outlive my term insurance?
The answer is “it worked”. You provided the protection during the years it was needed and you’re still around to enjoy the party. If the question is really about feeling bad about being alive and having spent that money, then look into return of premium term insurance. If you outlive the term you get all of your payments back, tax free. You get to enjoy the party and you will have provided that protection for free.
Can I sell my life insurance policy?
That’s called a life settlement. If you no longer need your life insurance policy, and it can still be converted to a permanent policy, there is a chance it can be sold. While that sounds quick and easy it’s important to understand that for a life settlement company it’s an investment. If you’re still very healthy it usually isn’t a good investment. You should also carefully weigh the cost of selling a policy versus keeping it if you’re in poor health.
What if I’ve been declined for life insurance?
If you have been declined there is a good chance it was because you chose the wrong agent who chose the wrong company. It is not unusual for one company’s decline to be another company’s approval at an affordable rate. The right agent will gather your information and shop it to numerous companies to find the best fit for you.
How do I know if I have enough life insurance?
There are a lot of ways to determine how much is the right amount for your need. When you’re considering “how much”, don’t forget to count your assets as a form of life insurance. While most assets are included in retirement planning, it isn’t uncommon to forget that if you pass away that same asset can help your family in the same way life insurance can. Also key to planning is your budget. Don’t buy more than you can comfortably budget and remember that something (life insurance in force) is always better than nothing (life insurance you couldn’t afford to keep in force).
How do I know I need life insurance?
It’s as simple as this. If your death would cause someone a financial hardship then you should carry life insurance to keep that from happening. Do you want your wife and children to depend on “Go Fund Me” if something happens? Do you want someone who has invested in your business to lose their money if you die?
More Questions? Check Out Our Blog!
The Hinerman Group knows that every situation is unique and it can be difficult finding the best answers. Be sure to check out our blog where you will find a comprehensive bank of topics covered regarding Life Insurance. The background covered in The Hinerman Group blog will point you in the right direction and help you get your family the coverage you need.
Want to talk? Call Ed directly at (719) 539-7914 for a FREE CONSULTATION. *Ed released the fish and it went on to have a full life. Occasionally Ed receives postcards from new waters and pictures of grandfish.