Life Insurance Questions & Answers
You can't predict your future, but you can prepare for it with life insurance.
Life insurance provides financial protection and peace of mind for you and your loved ones. Whether you choose whole life, term life, or indexed universal life (IUL), these policies offer options to meet your unique needs, ensuring coverage and flexibility as your circumstances evolve.
Below are some of the most frequently asked questions regarding Life Insurance.
What is life insurance, and why do I need it?
Life insurance provides financial protection for your loved ones by paying a death benefit if you pass away. It helps cover expenses like debts, income loss, or future needs such as education or retirement.
What is the difference between whole life and term life insurance?
Whole life insurance offers lifelong coverage with a cash value component that grows over time, while term life insurance provides coverage for a set period (e.g., 10, 20, or 30 years) with typically lower premiums.
How does indexed universal life (IUL) insurance work?
IUL offers permanent coverage while allowing the policy’s cash value to grow based on market index performance. It also provides flexibility to adjust premiums and coverage as your needs change.
What factors determine the cost of life insurance?
Life insurance rates depend on several factors, like your age, medical history, nicotine use, lifestyle, and the type of policy you choose. In general, the healthier and younger you are, the lower your policy premiums will be.
Do I need life insurance for my children?
Life insurance for children provides lifelong coverage, guarantees insurability, and can build cash value over time, which can help fund future needs like education or a home purchase.
Can I borrow against my life insurance policy?
Yes, with whole life and IUL policies, you can borrow against the accumulated cash value for emergencies, education, or other needs.
What happens if I outlive my term life insurance policy?
If you outlive the term, the coverage ends. However, many policies offer the option to convert to a permanent policy before the term expires.
How much life insurance coverage do I need?
It depends on your financial situation, debts, income replacement needs, and future goals. A common guideline is 10-15 times your annual income.
Is life insurance a good investment for building savings?
Whole life and IUL policies can build cash value over time, offering both protection and a savings component that grows tax-deferred.
Do I need a life insurance policy if I already have employer provided life insurance?
The general rule of thumb is to purchase a life insurance policy that's at least several times your annual salary. Even if your employer provides life insurance, you'll likely need additional coverage. This is because many group life insurance policies are capped at one or two times your annual income.
Can I get life insurance if I have pre-existing health conditions?
Yes, many policies are available for individuals with health conditions. Options like guaranteed issue life insurance ensure coverage, though premiums may vary.
