Term life insurance is a great way to help provide financial protection for your loved ones if you were to die. And luckily enough, it can be extremely affordable. But when it comes to choosing the term life insurance policy that’s right for you and your family, it’s important to make sure all your bases are covered by being prepared with the right questions to ask your life insurance agent. You may be wondering whether you’re too out-of-shape to get approved for a policy, if you’re too old, or whether you can name someone other than your spouse as your beneficiary. These are all common life insurance questions to ask! But don’t let these questions about life insurance, however uncomfortable they may feel, get in the way of finding out your term life insurance needs.
Questions and Answers on Life Insurance
Question #1: What is term life insurance?
This is always a great place to start. Term life insurance is a policy with a pre-set amount of coverage that is guaranteed for a certain amount of time (a term). Term life insurance policies generally have lower premiums, and they do not build cash value. In other words, if the policyholder dies at any point during the policy period, the beneficiary will receive the stated coverage amount in full. Term life insurance helps make coverage affordable by allowing you to pay only for the coverage you need.
Question #2: What does term life insurance cover?
Should the unthinkable happen, a term life policy can help pay for burdensome expenses, both unexpected and expected, as the family tries to navigate the loss of a loved one. The money can help pay for final medical bills and funeral costs. It can also help cover school tuition, rent, and groceries and serve as a replacement for lost income.
Question #3: How much coverage do I need?
There isn’t a set amount of coverage that’s right for everyone. A friendly agent can help you evaluate how much money your loved ones might need while they adjust to a new normal, tackle debt, and more.
Question #4: How much coverage does Direct Auto Insurance offer?
Depending on the state you live in, Direct offers individual 6-month and 12-month term life insurance at levels of $10,000, $15,000, $20,000, or $25,000*.
Question #5: Do I need to take a medical exam?
Some life insurance companies require a medical exam during the application process, which can be inconvenient. However, at Direct, all we ask is that you answer a few health-related questions. There are no appointments to hassle with, and no blood tests to feel woozy from.
Question #6: Can I get insurance for my family?
With Direct, you can insure yourself, your spouse, and your children (min. age 1 year old, max. age 60 years old). In addition, your policy is guaranteed to renew for two years at the same level and rate with no regard to your health, giving you and your family peace of mind.
Question #7: Am I too unhealthy to get life insurance?
Probably not, but it depends on the life insurance company, the type of life insurance policy, and what you mean by “unhealthy.” Some insurance companies require a full medical exam and ask you to provide your height and weight so they can calculate your body mass index (BMI).
Other companies, like Direct General Life Insurance Company (the carrier Direct Auto represents), don’t require a medical exam at all. We simply ask you to answer a few questions related to your health. The questions relate to diseases, cancers, tumors, or disorders (like diabetes, high blood pressure, multiple sclerosis, acid reflux, lung diseases other than asthma, etc.) that you may have been diagnosed with or treated for within the past year or two. Insurance companies know that no one is perfect, so don’t automatically assume that you won’t be eligible for coverage if you have a medical condition.
Question #8: Can my beneficiary be someone other than my spouse?
As the policyholder, you can designate practically anyone as your beneficiary: your dentist, neighbor, best friend, you name it! You can even designate multiple beneficiaries or have the proceeds of your policy paid out to your favorite charity.
There are a couple of things to keep in mind, however, if you choose someone other than your spouse as your beneficiary. One, life insurance companies won’t pay the proceeds directly to a minor, says Nasdaq. The age of majority ranges from 18-21 years depending on the state. Therefore, if you want to plan for the financial security of your children, you should take the appropriate estate planning steps such as establishing a trust or designating a guardian. Two, if you live in a community-property state your spouse will have to sign a form waiving their rights to the money should you choose to designate someone else as the beneficiary.
Question #9: Can I purchase life insurance policies for my kids?
Through Direct Auto Insurance, parents can purchase a term life policy for their children.** However, if your child is over 18, you must have their express written consent.
If you’re considering purchasing coverage for a child, it may be a good idea to ask yourself, “Why?” Life insurance is generally purchased to help replace someone’s wages should the unexpected occur, as the proceeds of a policy can help pay for everyday expenses like groceries, bills, or car payments. While most children don’t have an income that would need to be replaced, they could have funeral or memorial expenses. If these are costs that you, as a parent, worry about being able to cover for a child, a term life policy could be a good idea.
Question #10: Am I too old to be approved for a life insurance policy?
Maybe not. Similar to question #7, the answer to this one depends on your age, the life insurance company you choose, and the type of life insurance (term vs permanent) you’re applying for. Life insurance quotes tend to be lower and more affordable when you’re young and healthy. The sooner you can get coverage, the better, because as your age goes up, your quote is likely to go up as well.
Question 11: How much does term life insurance cost?
Generally speaking, prices vary depending on your answers to the eligibility questions, results of a medical exam (if your insurer requires one), and how much coverage you choose. With term life coverage through Direct Auto Insurance, you can protect your loved ones with a term life policy for less than $1*** a day.
Question #12: What happens if I can’t pay the premium?
Unfortunately, there are some situations in which your term life insurance policy could be terminated, and this is typically one of them. Remember: your premium is the amount of money you, the policy owner, agree to pay for coverage. It’s how you fulfill your end of the agreement with your insurance company. If you stop paying premiums, your coverage lapses. Or if your down payment or one of your premium payments does not clear a financial institution, your insurance company may terminate your policy. It’s important to note termination guidelines tend to vary by the insurance company.
Question #13: Can I get a policy without a checking account or credit card?
Not all life insurance companies offer multiple payment methods to get your policy started. They may require that you keep a credit card on file or may not have any physical locations that make it easy for you to pay by cash or check. If making your policy as affordable as possible is important to you, this is a key area to pay attention to. Ask about the type of payment methods the company accepts (like card, cash, check, etc.). At Direct Auto, having a checking account or credit card isn’t a requirement for getting a life insurance quote or policy, which leads us to the next question…
Question #14: What kind of flexibility do I have with my payments?
Ask whether or not your payments can be adjusted to better fit your budget. For instance, can you determine your down payment amount? Can you choose the time of the month you make your payment (like at the beginning or end of the month), and do you have the option to pay in person? The more flexibility you have, the more you can stay in control of your finances.
Question #15: How can I save more money on my insurance?
Choosing a life insurance company that offers flexible payment options is one of the best ways to make your insurance more affordable but taking advantage of available discounts is another way. For example, at Direct Auto you could save up to 5% with a multi-product discount† if you have both an auto and life Insurance policy, or another qualifying product like an Emergency Protection Plan and sometimes Roadside Assistance. Details vary by state.
Question #16: Will my life insurance premium change during the term of my policy?
At Direct Auto, you’re guaranteed renewal for two years at the same premium.†† At other insurance companies, whether or not your premiums remain the same for the entire term period or increase over time will depend on the type of term policy you purchase. Premiums could stay level, increase, or be guaranteed in the policy for a specific period of time and then go up thereafter.
Question #17: Can my term life policy be canceled if I get sick?
Let’s say you buy a term life insurance policy with a term of 12 months. About four months into the policy, you’re diagnosed with cancer. Can your term life insurance company cancel on you? The short answer is no. If you pay your premiums, the term life insurance company cannot cancel your policy within the term. With a Direct General Life policy, your renewal is also guaranteed for an additional 2 years without regard to your health so long as the premiums are paid.
Come to Direct Auto with Your Questions!
Still have questions about life insurance? The life agents at Direct Auto are here to serve you every step of the way, from quote to policy to payment. Get a free life insurance quote at a Direct Auto location near you, or over the phone at 1-877-GO-DIRECT. And if you’re not ready to buy term life insurance, you can still call and ask any life insurance questions. We look forward to talking with you!
* Individual term life insurance produced by Direct Auto Insurance for Direct General Life Insurance Company and National Health Insurance Company (MI only). Policy nos: 58TL02010713, 12400(OH), 12802(WA) 12815(MI) and IIC-12815. Direct Auto Insurance, Direct General Life Insurance Company and National Health Insurance Company are members of the National General Group, Winston-Salem, NC.
**Written consent required of children 18 and older.
*** Per day amount based on annual premium for insured 18-50 years old with a $25,000 policy. Premium and other terms will vary by state, the insured’s age, and the selected coverage.
† Discounts subject to terms and conditions. Not available in all states.
†† Policy terms and conditions apply.