Common ​Life Insurance Questions

​Why do I want life insurance?
  • Protects your family or future family from your debt (school, house, consumer) and expenses related to your death
  • And provides continued monetary assistance to those you may already be supporting
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What and who do you need to cover?
  • Single or unmarried but supporting family
  • Married with or without children
  • Stay-at-home mom or dad
  • Single parent
  • Empty nester
  • Retiree
  • Essentially, everybody should at least consider getting life insurance

Who may not need coverage?
  • Young and without dependents: may lock in a low premium but may also pay out the premium for a long time before you would necessarily need it
  • Older with no dependents: if you’ve saved enough to provide for the needs of you and your spouse or partner

How much coverage do I need?
  • Every person and every situation is different, so your life insurance policy should be unique to your life situation, but there are two primary ways this can be calculated
  • Income Replacement: determined by age and the number of years of income your family would need in the event of your death then multiply the number by annual income. Other factors such as inflation are also factored in.
  • Needs-based: this is based on your personal situation and factors in the impact of your death, your current debt and mortgage and other costs. This is more specific and often the preferred method for an accurate assessment of the coverage you need.

What type of life insurance is best for me?
  • Term Life Insurance
    • Covers you for a specified time period – 10, 15, 20 or 30 years
    • If you die within the term, your beneficiaries receive the face value of the policy, tax free
    • Provides the most protection at a fixed cost for the specified term
    • Pay out levels include decreasing, level and increasing
      • Decreasing: the amount paid out reduces as your mortgage is paid down, which lowers your premium
      • Level: pays out the same no matter when you die
      • Increasing: you pay a higher premium but the amount that would be paid out increases to take account of inflation during the term of the policy
    • Primary benefit: typically offers the highest death benefit for the lowest cost
  • Permanent Life Insurance
    • Includes whole life insurance and universal life insurance
    • Protection is for the duration of your life
    • The value of the policy is a return on the premiums that were invested by the insurance company and is tax deferred until withdrawn
    • Premiums for permanent life insurance are higher than term life insurance policies
    • Primary benefit: offers lifelong protection and, in some cases, tax-deferred savings
  • Recommendation: Choose permanent life insurance if you want to protect your family against the destruction of your business or estate taxes after your death and choose term insurance if you primarily want to protect your family from the loss of your income

Should I just use my employer’s life insurance?
  • It is often times more expensive than an individual policy, usually around 30-70% more
  • Offers less coverage and less specific coverage to your needs
  • Your employer’s life insurance policy will not follow you if you leave the job for any reason

How is my premium determined?
  • Your payment premium is determined by which health class you belong in. These health classes are based on tobacco use, weight to height ratio, cholesterol, blood pressure and notable personal health issues, like alcohol intake for example. The lowest premiums are offered to people in excellent overall health living a healthy lifestyle.
  • Also, your policy or claim can be denied if you leave out vital health or other related information in order to attempt to reduce your premium. Please provide full and accurate information when applying for life insurance.

What other questions should I ask my insurance representative?
  • Does it make sense to take out separate or joint life insurance for myself and my spouse?
  • How should my beneficiaries receive payment? What makes the most sense for our situation?

What should I make sure to understand about my new life insurance policy?
  • Make sure you fully understand your policies coverage, premiums, renewal, fees and termination clauses
  • Also, make sure you understand what your beneficiaries must do when you pass to obtain benefits and how it will be received (monthly payments or lump sum)