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Life Insurance Q&As
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Basics
What is life insurance?
What is the connection between risk and life insurance?
Do I need life insurance?
Why buy life insurance?
Wouldn’t my group insurance from work or social security or mutual fund assets pay these needs?
How should I go about buying life insurance?
What government agency has regulatory authority over life insurance? How do I find the address and phone number for my state insurance department?
How do I find a good life insurance agent?
What do letters like c.l.u, Lutc, Or designations such as chartered financial planner indicate?
What does it mean to be the owner of a life insurance policy? Who is the owner of my policy?
How Much Do I Need?
Is there a certain amount of life insurance i'm required to buy?
I have a hard time saving money. Should I buy life insurance as a form of forced savings?
What should I do if I have problems in getting coverage?
What is a “needs analysis”? Do I need one to determine how much life insurance I should have?
How is cost determined?
Will I have to be examined by a doctor to buy life insurance?
Do I need to give personal information about my medical condition and finances to get insurance?
What about companies that advertise no physical exam?
What happens to the medical information from my application?
I am concerned about my medical information being available in a report. How do I get a copy of my mib report?
Will I need life insurance when I retire?
Should I buy life insurance for other members of my family such as my spouse or children?
Will a life insurance policy affect my eligibility for medicaid benefits?
Do I need a financial planner?
Do I need a lawyer to help me buy insurance?
Can I buy life insurance over the internet or by telephone or mail order?
How do I get life insurance quotes over the internet?
I see ads for life insurance at much lower rates than the policy I am presently paying for. Should I discontinue my current policy and buy a new lower cost policy?
An insurance agent has offered to review my policies and check the beneficiaries and policy provisions. Should I agree to this, Or is this just another attempt to sell me more insurance?
How do I get the “best deal” on life insurance to cover my insurance needs?
Group Plans
What are the basic types of group life insurance?
What are some of the contrasts with individual insurance?
What are the limitations of a group plan?
What are the advantages of a group plan to the employee?
My employer's group life insurance coverage ceased when I was terminated. Can I convert to an individual policy?
I am being laid off. Will my employer's group coverage continue during my layoff period?
I will retire next year. Will I be able to convert to an individual policy without having to pass a medical examination?
Should I get life insurance on my own or through work or occupation?
I already have group life insurance at work. Why might I need to purchase individual life insurance?
Naming Beneficiaries
Who can take out a policy on my life?
Naming beneficiary(ies)in life insurance. Should I name that person as the beneficiary of my life insurance or make it payable to my estate and have it distributed according to my will? Does the beneficiary have to be a relative?
Changing beneficiary
Number of beneficiaries
What is the effect of social security payments on a beneficiary?
What is the effect on a beneficiary’s federal income tax liability?
Filing a claim
My sister and I were listed by my deceased father as beneficiaries. The insurance company paid the proceeds to my sister because she was listed first. Is this right?
What is a contingent beneficiary, A revocable beneficiary, And irrevocable beneficiary?
I can’t find my dad’s insurance policy and don’t know what company he had it with. What should I do?
I just discovered that I was the sole beneficiary for a policy purchased by a distant relative years ago. How do I find out if I have any money coming?
A family member died. I believe that this person had a life insurance policy with me as beneficiary, But I cannot find the policy. Do I need a policy in order to make a claim?
A funeral director requests that life insurance policies be made payable to him or her or to the funeral home. Supposedly this will simplify matters at the time of death. Is this a good idea?
If I am living with someone in a non-marital relationship, Can I buy insurance on that person or have my partner as my beneficiary?
Types Of Life Insurance Policies
What is term insurance?
What are the common policy variations of term life insurance?
My insurance agent recommended a term policy. What are some considerations?
What is cash value life insurance?
How does cash value differ from term?
If my agent recommends a cash value policy, What should I consider?
What is whole life insurance?
What are the traditional types of whole life policies?
What is universal life insurance?
What are other life insurance coverages?
What are endowment policies?
Which policy should I buy? How can I hope to get the right plan for my needs?
I am on a tight budget. Where can I find the most coverage for the “leastest”?
I buy no-load funds, Shop at discount stores, And use coupons at the food store. I don’t need a lot of hand-holding. So how can I avoid paying high commissions to buy life insurance?
I was told by an insurance agent that I should buy cash value insurance to create some forced savings. Is that a good way to accumulate some savings?
Should I buy what my agent calls “permanent life insurance” (whole life or endowment or other cash value policies)?
How do I protect my family from losing our house if I die while still having a mortgage to pay?
Effect Of Age, Sex, Health and Lifestyle
What is the importance of age/sex/health?
How might my smoking affect my ability to buy life insurance?
I am healthy but like to participate in some potentially risky activities such as auto racing, Parachute jumping, Piloting experimental aircraft. Will this become an issue when I buy life insurance?
I sometimes travel to areas of the world where sanitation, Health and medical standards are not always up to american standards. Will this affect my ability to buy life insurance?
The Life Insurance Contract
Can I change my mind and get a refund?
Can the insurance company cancel my policy?
Can a company refuse to pay a claim?
Can a company void my policy if I lie or make a mistake in completing the application?
Can a company void my policy if I moved to a new state?
What is a “cost disclosure” form?
A computerized statement provided by the insurance company for a specific policy shows how much money I will get back in various years after buying the policy? Are these numbers guaranteed? Is it right that I could stop paying premiums after only a certain number of years?
An agent wanted me to buy a “retirement plan.” when he showed me the contract, It said “life insurance” in the description. How can I be sure what I am buying?
Can I get my policy information and other documentation in a language other than english (e.g. Spanish, Chinese, Etc.)?
If I move to another to another country or from one state to another state, Will this affect my existing life insurance policy?
If I make a mistake and misstate my age when I get life insurance, Will my policy be invalid?
I believe one of my family members had policies that became “paid up” after premiums were paid for many years, But I cannot find the policies. What should I do?
If I get divorced or break up with my partner, How might this affect my life insurance policy?
Basic Life Policy Provisions
Type of policy
Face value
Length of coverage
Cash value
Policy loan
Nonforfeiture options
Dividends
Incontestablity provision
Riders
Accelerated benefit riders
Misstatement of age and/or sex
Suicide clause
Settlement options
Paying The Premium
What if I miss a premium payment-- do I lose my insurance?
Cash value build-up
How about the automatic premium loan clause?
What if I become disabled or unemploy8ed and cannot pay the premium?
If I pay my premium and then decide to cancel my policy, Will I receive a PRO rata refund?
If I forget to pay my premium and the policy lapses, Is there anything I can do?
Collecting Death Benefits
Is the company required to pay death benefits if the insured commits suicide?
What are settlement options?
What are the typical settlement options?
What if I am not ready to decide?
What are contested benefits?
Examples of contested benefits
If there is a delay in an insurer paying the death benefits after a claim is made, Is the beneficiary entitled to any interest on the death benefit?
When a family member died, I received a form suggesting that I allow the insurance company to hold the proceeds in a fund with the option of writing checks from the money when I am ready. Should I agree to this?
Choosing The Insurance Company
Should I worry about the company’s financial soundness?
What assurance do I have that the life insurance company will still be in business and able to pay a claim some years from now?
What assurance do I have that the life insurance company will still be in business and able to pay a claim some years from now?
How do I check up on a company’s financial strength?
What happens when a company becomes insolvent and is liquidated?
What is the “cost index”?
How important are "ratings"?
How do I interpret a rating?
What services examine and rate insurance companies?
Who regulates the insurance industry?
What’s the difference, To me as a consumer, Between a stock company and a mutual company?
How do I make a complaint with the insurance department about my life insurance company?
Tax And Estate Implications
Are there tax benefits associated with life insurance?
Can I gift a policy?
Can I have life insurance paid to a grandchild?
Switching Companies/Policies
I want to cancel a life insurance policy and purchase a new one. Anything wrong in that?
My agent suggested switching term every couple of years to take advantage of a company’s promotional rates. What are some of the things I should consider?
Selling Policies--Viatical Settlements
What are they?
How is the sales price determined?
How much is the payout?
What should be considered in such an arrangement?
Who is eligibile?
How is a transfer of ownership of a life insurance policy to a viatical company recorded?
What happens if the viator dies sooner than expected?
What happens if the viator outlives his or her life expectancy?
Can viators change their minds?
I am an investor and wish to use viaticals in my ira, Or alternatively, In a keogh, Or defined contribution plan. Is that a problem?
Miscellaneous Questions
Are the values of my life insurance policy exempt from the claims of creditors or from bankruptcy proceedings?
I was treated for cancer about 8 years ago and the physicans have said that I was completely cured. Can I be turned down for coverage?
I got a loan from my insurance policy, But never paid back the interest. What will happen?
What happens if my outstanding loans plus interest due exceed the policy loan value on my policy?
My company has an on-site office at my place of employment where an insurance agent comes each week to answer insurance questions about insurance and sell additional insurance to employees. Is this a good way to buy life insurance?
How do I find an agent for someone who needs life insurance, But does not speak english?
I have a problem with my life insurance that I have been unable to resolve with my insurance agent. Where do I go next for help?
The state took money from an old life insurance policy that I had forgotten about as unclaimed property. Can I get it back?
How do I know that my insurance company will not declare my life insurance policy invalid as a result of a mistake I might have made years ago on my application for the insurance?
I have heard that life insurance premiums for women are lower than the life insurance premiums for men? Is this true? And what is the reason for this?
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