Straight answers to the questions we hear most often, from the licensed life insurance professionals at Eterm.com and CIGI Direct - helping people find the right coverage since 1986. Have a question we haven't answered here? Call us at (888) 823-8376 or send us a message.
Life insurance is a contract with an insurance company to pay a lump sum (or scheduled payments) to your designated beneficiary if you pass away. It is most commonly used to replace your income, cover debts, or provide an estate for your loved ones if you pass away prematurely. Some policies also provide benefits for terminal illness or long-term care.
If you have loved ones who depend on you for financial support, then yes, you probably do. Should something happen to you, your life insurance would replace the loss of your income for your family. The lump sum they receive from your life insurance would help them to cover your final expenses, pay off debts, fund ongoing living expenses, and cover college tuition. It can mean the difference between your family struggling to make ends meet or continuing the lifestyle you are providing for them.
You pay premiums (monthly, quarterly, semi-annually, or annually) to an insurance company and in exchange, they guarantee a lump sum payout to your beneficiaries, generally free of income tax.
A general rule of thumb is that you should have at least 10 times your annual income. That varies widely however, depending on your age and individual circumstances. If you have young children at home, your needs might be as high as 20 or 30 times your income. The right amount varies significantly based on your stage of life, debts, family needs, and future goals such as college expenses. A financial professional can help you figure out how much is best for your situation.
Life insurance rates can vary significantly based on your age, health, smoking status, coverage amount, policy type, and level-premium period. Permanent policies, such as whole life or universal life, typically cost more than term insurance, and a 30-year level term is more expensive than a 10-year level term. Rates also differ by company. You can view sample term life insurance rates by age or get a personalized free, no-obligation quote.
Life insurance generally covers most causes of death, including illness, accidents, and natural causes. Suicide during the first two years of the policy is usually excluded, and a claim may be denied if fraudulent statements were made on the application.
Any time someone else is relying on your income, you should consider buying life insurance. When you are young and healthy is the best time to lock in the lowest possible rates. If you have a spouse or children who rely on your income you almost certainly need some life insurance.
Term life insurance provides a fixed benefit and premium for a set period, typically 10, 15, 20, 25, 30, 35, or 40 years. Because it covers you for a limited time, it usually costs less. Permanent life insurance is designed to last your entire life, so its premiums are higher.
You apply online or through an agent. For the best rates, you will submit an application that includes a medical history and usually complete a brief health physical examination. For the best deal, look for a broker who represents a number of different companies who can help you find the best deal given your specific situation. You can start with a free quote comparing rates from dozens of companies.
Yes, although rates are usually much higher because insurers take on greater risk. These policies are often called simplified issue or guaranteed issue plans. For quotes on no-exam life insurance, try our sister site HardToInsure.com.
Yes, but you must prove that you have an insurable interest, meaning their death would financially impact you. They also need to consent, sign the application, and go through any medical underwriting.
Employer-provided life insurance is a valuable benefit, but it is usually not enough on its own. Group coverage is often limited to one or two times your salary, and you typically lose it when you change jobs or retire. An individual term life policy stays with you no matter where you work, and lets you choose the coverage amount your family actually needs.
When the level-premium period ends, most term policies can be renewed annually at much higher rates. Many policies also include a conversion option, which lets you exchange your term policy for a permanent one without going through underwriting again - extremely valuable if your health has changed. Understanding a policy's conversion options before you buy is one of the most important, and most overlooked, parts of choosing coverage. Our agents can walk you through it at (888) 823-8376.
Generally, no. Life insurance death benefits paid to a named beneficiary are usually free of federal income tax. Taxes can apply in some situations - for example, if the payout goes to your estate instead of a named beneficiary, or if the policy was sold or transferred - which is a good reason to keep your beneficiary designations up to date.
Usually, yes. Every insurance company treats health conditions like diabetes, high blood pressure, and heart conditions differently - one company may decline an application while another offers a competitive rate for the same person. That is where an independent agency makes the difference: we know each company's underwriting and match you with the one most likely to say yes at the best price. Call us at (888) 823-8376 or send us a request - helping people with health conditions get covered has been our specialty since 1986.
Ready to see your rates? Use our free, instant term life insurance quoter - no login or contact information required - or browse sample rates by age.
