When you decide it’s time to purchase life insurance, you’ll probably have a few questions about coverage, policy types, and whether or not you’re likely to be approved for your desired policy. Asking the right questions is extremely important. The outcome will determine your status of approval, your monthly premiums, and the full extent of financial protection and preparedness that your family or beneficiary(s) will receive in the event of loss.
Right now, you are taking positive steps to remove what could be a huge financial burden for your family. This one step can bring you peace of mind you may be searching for.
If you’re having some trouble deciding what questions are most important before applying for life insurance, don’t worry. We’ve compiled a list of the most important questions to consider when purchasing life insurance so that you feel confident in your decision.
I Have a Preexisting Medical Condition. How Will This Affect My Eligibility for Life Insurance?
The short and direct answer to this question is unfortunately, yes. However, while your preexisting medical condition will most likely influence your approval and premium, the level to which your medical condition affects your acceptance and premium is entirely dependent on the severity of your condition, if and how well it is managed, your prognosis, and the amount of risk that the insurance company is willing to assume.
If your condition is well managed and you are otherwise healthy, it is likely that the life policy underwriters will see you as eligible for the policy of your choice, at a slightly higher premium than individuals that do not have a medical condition. Now, if your medical condition is not well controlled and you are in questionable health, you may be denied for coverage for many term life insurance policies and may benefit from considering a simple, no medical exam policy. Remember, your medical condition may influence your premium but regardless of your medical condition, there is usually coverage options for everyone.
Is a Physical Required to be Approved for Life Insurance?
Unless you’ve have selected a no medical exam life insurance policy you should expect to have a physical exam – complete with a FULL Blood Panel if you have a Preexisting medical condition. The insurance company will use this information to determine how well your condition is controlled and whether or not they are willing to assume the additional risk and issue you a policy. These results can and will also influence your premium amount for better or worse.
How Much Life Insurance Do I Need?
How much life insurance coverage you need is dependent on what finances you will need covered or replaced in the event of the passing of the insured. When assessing how much coverage will be needed, be sure to account for all debts…ie mortgage, car payments, loans, any credit cards, miscellaneous monthly payments, and lost income over a number of years. Totaling these amounts will help you better visualize exactly how much coverage you will need. We recommend a full needs analysis be completed prior to any purchase. Provided you can afford the necessary coverage, you should consider that to be the target amount of insurance to acquire.
Would My Policy Have Any Cash Value?
Another short answer here.
It depends on type of policy you were approved for and how long it has been in force. To be clear, term life insurance policies have no cash value, they are temporary by design and for the number of years applied for…10, 20, 30 years are the common lengths. They simply guarantee payout of the death benefit (face amount) should the policyholder pass one while holding the policy/contract. Permanent life insurance is the type protection that typically builds cash value – a benefit that you can use or leverage while living if desired. To find out whether your policy builds cash value, speak with a qualified and seasoned independent life insurance agent or broker.
Can I Keep Life Insurance Coverage Permanently?
If you’ve elected to apply and/or own permanent life insurance, you can keep this coverage for as long as you continue to pay the required premiums. Permanent insurance includes, whole life insurance as well as universal life insurance.
However, if you elected a term life insurance policy, you will only retain coverage at the original premium for the duration of the agreed upon term (commonly 10, 20, 30 years) selected by you at application time. After that, the policy will become very expensive or terminate completely.
Understanding and knowing why you need to have a life insurance policy in place is the first part of the process. Knowing which type of policy to hold and what questions to ask a life insurance professional about those policies is the second.
We have answers to your questions. Please feel free to touch base with us if you have any additional questions about life insurance coverage. Call 269-230-3464 or send us an email. We are here to help.