Frequently Asked Questions
Can I afford life insurance?
A better question to consider may be: Can you afford not to have coverage? The cost of life insurance depends on a number of factors, starting with the type of policy and coverage amount you choose.
Are all life insurance companies the same?
No. Many people choose a life insurance company on price. The company that offers coverage at the cheapest cost, may not be your best choice in the long run. There are a number of other important factors that you want to consider, including the company’s longevity, financial strength, and stability.
What is a beneficiary, and who can you name as beneficiaries?
A beneficiary is the person or entity you select to receive the death benefit from your policy when you die. A beneficiary can be any adult person, your favorite charity, a nonprofit organization, business or other entity. You also may establish a trust for your young children and name the trust as a beneficiary.
Does your employer’s life insurance provide you enough coverage?
Probably not. The majority of employer-sponsored life insurance policies are only in force while you are employed. When you leave your job, this coverage usually ends. In addition, your coverage is often limited to the amount of one year’s salary, which may not be enough to cover all of your family’s expenses when you die.
How many life insurance policies can you have?
There is no limit to the total number of policies you can have, but you don’t want to pay for excessive coverage, either. Having multiple policies — especially a whole or universal life policy that builds cash value to access while you are alive — could help make up for any cash shortfall if you become ill.
How does life insurance pay out death benefits?
When you purchase life insurance, you choose a beneficiary, the person or entity that would receive the death benefit if you passed away while the policy is in force. When you die, the beneficiary would then fill out a claim form for the insurer and submit a copy of your death certificate. After reviewing the claim, the insurance company would pay the death benefit to your beneficiary — provided that you didn't die of an excluded cause.
When is the best time to buy life insurance?
The best time to buy life insurance depends on your particular life situation but often occurs when you experience a major life event like getting married, buying your first home or having a baby. Increased financial responsibilities usually accompany these significant life milestones, heightening the need for you to think about how to provide your loved ones with greater financial security in the future.