Buying a life insurance policy is a big decision. Term life insurance is a great way to help protect your loved ones if anything were to happen to you. 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.
It can mean asking, and answering, some pretty personal questions, too. 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. Don’t let these questions, however uncomfortable they may be, get in the way of your life insurance policy.
We’re here to provide you with a handful of helpful answers to personal questions you might be too nervous to ask your insurance agent along with plenty of important questions to ask your insurance agent about term life insurance. When shopping for a life insurance company, make sure you’re picking one that aligns with your needs, your budget, and your even your personality! With the answers you need, you can make the best decision for yourself and your family. (And hey, if we don’t cover your question below, feel free to reach out to us by phone or visit a Direct location near you.
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, but they do not build cash value. This type of policy makes life insurance extremely affordable, allowing you to pay only for the coverage you need.
Question #2: What does term life insurance cover?
Should the unthinkable happen, this policy could help pay for unexpected medical bills, school bills, funeral costs, and loss of income. A term life insurance policy could help support your family and loved ones if something were to ever happen to you.
Question #3: How much coverage do I need?
This is based on how much money your loved ones might need and how much debt you might have to pay off. We can help you determine the exact number with regard to your current and future financial situation.
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, or $25,000.
Question #5: Do I need to take a medical exam?
Not for a Direct term policy—we don’t require a medical exam. However, some other life insurance companies require a medical exam during the application process, which can be inconvenient. At Direct, all we ask is that you answer a few health-related questions. There are no doctor’s appointments to hassle with, no blood tests to feel woozy from, and no need to provide personal details like your height and weight.
Question #6: Can I get insurance for my family?
You can insure yourself, your spouse, and your child (min. age 18 years old, max. age 60 years old). In addition, your policy is guaranteed to renew for two years at the same 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. It depends on the life insurance company you choose 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 Auto Insurance, (as mentioned above) don’t require a medical exam at all. We simply ask you to answer a few questions related to your health, none of which are related to your weight. The questions relate more to diseases, cancers, tumors, or disorders (like diabetes, high blood pressure, multiple sclerosis, acid reflux, 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 few things to keep in mind, however, if you choose someone other than your spouse as your beneficiary. One, life insurance companies typically won’t pay the proceeds directly to a minor, says Nasdaq. 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. Community-property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Question #9: Can I purchase life insurance policies for my kids?
Through Direct Auto Insurance, parents can purchase a term life policy for their adult child only with the child’s written consent. If you’re considering doing so, 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 an adult child, a term life policy could be a good idea.
Question #10: Am I too old to be approved for a life insurance policy?
Probably 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 you choose (term vs permanent). Life insurance quotes tend to be lower and more affordable when you’re young and healthy. As your age goes up, your quote is likely to go up as well.
Question #11: 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, agrees to pay for the life of the policy. It’s how you fulfill your end of the agreement with your insurance company. If you stop paying premiums, says the Insurance Information Institute, 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. (Note, termination guidelines tend to vary by insurance company.)
Question #12: 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 in 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 #13: 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 #14: 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 #15: 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. That is to say, they could go up! Premiums could stay level, increase, or be guaranteed in the policy for a specific period of time and then go up thereafter.
Question #16: 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. As long as you pay your premiums, the term life insurance company cannot cancel your policy within the term.
I’m more of a visual learner. Do you have a video I can watch?
Of course. Check out our whiteboard video on term life insurance below.
Come to Direct Auto with your questions!
Still have questions? Direct Auto is 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!
*Discounts may only apply to certain coverages and are subject to terms and conditions and may not be available in all states or distribution channels. Price may vary depending on how you buy.
**Policy terms and conditions apply. Individual term life insurance by Direct General Life Insurance Company, Nashville, TN. Policy 58TL02010713. Premium and other terms will vary by state, the insured’s age, and the selected coverage.