- Q: When should I buy life insurance?
A: There is no specific age to purchase life insurance. It all depends on individual circumstances and necessities. The simple rule is that life insurance premiums increase with age. Hence, purchasing life insurance in your younger days can get you inexpensive premiums. Cash value policies offer accrual benefits. A guaranteed insurability rider can help you purchase additional insurance later without having to prove insurability. Purchasing term insurance with renewability provision is a good option.
- Q: What does insurable interest mean on a life insurance policy?
A: Insurable interest is your interest in a person's life; rather, you suffer emotional and financial loss at the death of the person. This interest should be present at the time of taking the policy. Purchasing life insurance for yourself is justifiable. Similarly, insurable interest exists with people you share strong emotional bonds like spouse and children. Insurable interest also exists between grandparents- grandchildren, siblings, business partners, and key employees.
- Q: Can I do anything to lower the cost of life insurance?
A: Life insurance premiums are according to your present health, lifestyle, habits, and age. Quit certain habits like smoking, drinking, and drugs to benefit from lower premiums. Restrict riders to the essential ones as these increase premium costs and usually offer duplicate coverage. Look into life insurance details thoroughly to locate any hidden fees. Shopping around and gathering information can procure you life insurance at competitive rates.
- Q: What is a life insurance medical exam and how should I prepare for it?
A: Life insurance medical exam is normally required for people over forty, or if you purchase life insurance for more than $100,000. Exam consists of a physical, blood, and urine tests. Sometimes it is necessary to have EKGs or stress tests too. Avoid smoking or caffeine for an hour before the exam. Stay away from alcohol and do not do any strenuous exercise for twenty-four hours before exam.
- Q: I want to convert part of my term life insurance to permanent life insurance. How does this work?
A: Convertible term life insurance contains a special provision that entitles you to convert it into a permanent life insurance similar to whole life, universal life, or variable life. Conversion is normally possible within specific period after taking the policy or before you attain certain age. You do not have to show any proof of insurability at the time of conversion.
- Q: Do I need to buy a separate life insurance policy for my child?
A: A child death benefit rider on your life insurance is sufficient. This can help make up for insufficient coverage available for dependents through your group health plan. Normally, child life insurance is not necessary, as insurance is to cover lost income at the death of the insured. Children normally do not earn and therefore child life insurance is unnecessary.
- Q: How do I change the beneficiary on my life insurance policy?
A: Changing beneficiary on a life insurance policy is simple. Such request should be in writing and on specific form. Your insurance company provides all essential directions. If you have an irrevocable beneficiary, it is not possible to change without consent of present beneficiary. In case of such change due to divorce, comply with all terms of your divorce decree before changing beneficiary.
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