Most people have a lot of questions about life insurance, and sometimes the answers provided can be a bit confusing, especially if you are listening to advice from friends and family members. Life insurance is an important purchase that will protect your loved ones in the event of a tragedy; you should get all your questions answered before you buy. The answers to these top life insurance questions aren’t complicated, and they will help you to find the right policy and remove some of the anxiety from shopping for this important policy.
- Does it Matter When I Buy?
Yes, it absolutely matters when you buy your life insurance. As a general rule, the longer you wait, the more you are likely to pay for your coverage. That’s because as you get older, the risk to the insurance company grows. The younger and healthier you are when you buy a policy, the better your rates. A health crisis can happen at any age, so thinking you have plenty of time to buy before your health becomes an issue could be a serious mistake.
Once you have been diagnosed with a serious illness or potentially life-threatening condition, it becomes much harder to obtain life insurance. The bottom line is that the sooner you buy, the better off you are. You’ll get more coverage for less money, and you will avoid the risk of being turned down due to health issues.
- Can a Smoker Get Life Insurance?
Yes, smokers can qualify for a life insurance policy, but they will pay a higher premium for the coverage. Unfortunately, the health risks associated with smoking are all too well known, and insurance companies are taking on a higher risk by insuring smokers.
The good news is most life insurance companies consider you a non-smoker after you have quit for only 12 months. That means that if you quit smoking, you’ll qualify for better rates after a year nicotine-free. That’s just one of the many benefits of quitting.
- What Happens When a Term Policy Expires?
While a term life insurance policy has an "expiration date" at which point the policy period comes to an end, in most situations that doesn’t mean you’re out of luck. Most term policies can be renewed, and some can be converted to whole or universal policies at that time as well. So, while the term policy technically expires, you don’t have to give up the coverage.
It’s important to note, however that since you have aged and your health may have changed since you first took out the policy, you can’t be guaranteed the same rate if you renew or convert the policy. You may have to undergo a medical exam to qualify for a renewal. For a long-lasting policy that doesn’t require renewals, it’s best to consider a whole or universal policy, which won’t have the same risk of a rate increase.
- Can I Have More than One Policy?
You can carry as many life insurance policies as you can pay the premiums on, as long as you qualify. Of course, most people don’t carry many but instead increase the death benefit amount on the one they have. It’s usually more affordable. However, many people have a private policy in addition to a policy provided by an employer in order to carry more protection.
Many people also choose to carry both a permanent (whole or universal) policy and a term policy. This is because term life insurance policies are cheaper, so you can carry a larger amount of coverage on that policy for the time period when you need it most, and keep a smaller permanent policy in place so that you will always have some coverage. Your insurance professional can help you to determine what combination works best for you.
- Do I Have to Pass a Medical Exam to Get Covered?
No, you don’t necessarily have to take or pass an exam. Some insurance companies offer no-exam policies that allow you to simply answer a few basic health questions. Some don’t have any questions at all. Bear in mind that you may pay a higher premium and receive a lower death benefit amount if you choose to avoid the medical exam.
If you are in good health there is no reason to avoid the exam; it doesn’t take long and can help you to qualify for better rates and a better policy. While it’s not necessary to get coverage, it’s usually a beneficial choice.