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We’ve put together these FAQs to help make this process as easy for you as possible.
If you don’t see an answer to your question below, please call us at 484-919-5423
- we’d love to help!
Life insurance comes in many shapes and sizes, but the different types of life insurance policies generally fall into two broad categories:
- Term life insurance
- Permanent life insurance - most commonly called Whole Life
The main difference is that term insurance provides temporary coverage for a specific period of time (your policy duration or "term" usually, 10, 15, 20 or 30 years) while whole life provides permanent coverage for your entire life. Therefore term life insurance is temporary while whole life insurance is permanent.
With term insurance, a death benefit is the only feature. But whole life policies combine both a death benefit and a savings feature.
For many people term life insurance is the best choice as it is more economical. However, there are times when permanent insurance makes more sense. The type of life insurance you should buy depends on various factors such as your personal situation, your health condition and your financial goals.
How much life insurance do I need?
This varies from person to person and depends greatly on your personal financial circumstances.
As a general rule we look at least about 10 times your annual salary in coverage but the very minimum amount of life insurance should cover the outstanding amount on your mortgage and any other large debts which would need to be settled upon your death as well as future financial obligations such as college tuition, etc.
What Type of Medical Exam Do I Need to Have?
Most companies require a medical exam as part of the life insurance application process. This medical exam can be completed at your home or any other convenient location. It takes about 15-30 minutes and is conducted by a licensed paramedical examiner or medical doctor. During the exam, the paramedical or medical doctor will likely:
- Inquire about your medical history (surgeries, medications, various conditions)
- Secure information on your immediate family's medical history
- Get physical measurements and vital statistics such as height, weight, blood pressure and heartbeat
- Draw a blood sample
- Get a urine sample
Ask about lifestyle habits that could impact your health (hobbies/activities, tobacco, alcohol and recreational drug use, etc)
Additionally, in rare cases there may be additional tests you need to undergo depending on your age, the type of policy you want and the amount of coverage for which you're applying. Additional tests could include an EKG, a chest X-ray, and/or an EKG treadmill test.
Additionally, in rare cases there may be additional tests you need to undergo depending on your age, the type of policy you want and the amount of coverage for which you're applying. Additional tests could include an EKG, a chest X-ray, and/or an EKG treadmill test.
The exam is no cost to you and you are entitled to a copy of your results whether you take the policy or not.
How do I determine the financial strength of my life insurance company?
Financial rating companies such as A.M. Best, Standard & Poor’s, and Moody’s and Fitch regularly evaluate the long term financial strength of life insurance companies across the country. These companies review each life insurance company’s financial balance sheets, business profiles and overall operating performance. The ultimate goal is to determine whether a life insurance company is in a secure financial situation or a vulnerable one.
A life insurance company in a secure financial situation will have a better rating.
The rating system is simple. Financial rating companies appoint letter grades to each life insurance company, similar to how grades are distributed in schools.
Financial rating companies such as A.M. Best, Standard & Poor’s, and Moody’s and Fitch regularly evaluate the long term financial strength of life insurance companies across the country. These companies review each life insurance company’s financial balance sheets, business profiles and overall operating performance. The ultimate goal is to determine whether a life insurance company is in a secure financial situation or a vulnerable one.
A life insurance company in a secure financial situation will have a better rating.
The rating system is simple. Financial rating companies appoint letter grades to each life insurance company, similar to how grades are distributed in schools.
What is temporary life insurance? How do I get it?
Temporary life insurance provides you with coverage during the life insurance application/underwriting process. Most life insurance companies give you the option to obtain temporary coverage by paying the first month’s premium payment along with your application. This will ensure that your loved ones are financially protected if you die before your policy is issued. This is often referred to as “binding.”
Keep in mind that obtaining temporary life insurance coverage is not a requirement by life insurance companies, but is highly recommended.
Also, you’re guaranteed a full refund of your first premium payment up to 10 days after receiving your term life insurance policy. So, there’s nothing risky about opting for temporary coverage. A bigger risk would be not opting for it.
Temporary life insurance provides you with coverage during the life insurance application/underwriting process. Most life insurance companies give you the option to obtain temporary coverage by paying the first month’s premium payment along with your application. This will ensure that your loved ones are financially protected if you die before your policy is issued. This is often referred to as “binding.”
Keep in mind that obtaining temporary life insurance coverage is not a requirement by life insurance companies, but is highly recommended.
Also, you’re guaranteed a full refund of your first premium payment up to 10 days after receiving your term life insurance policy. So, there’s nothing risky about opting for temporary coverage. A bigger risk would be not opting for it.
Should my spouse have life insurance too?
Most families have coverage on both husband and wife. There are many financial pressures on a family after the loss of either parent. Beyond the obvious final expenses, the financial strain on a family can be significant, even if the deceased spouse wasn’t working.
The surviving spouse may need to take time off work, or change jobs in order to spend more time with the children. Therefore, your financial plan should include life insurance for both spouses/parents.
Most families have coverage on both husband and wife. There are many financial pressures on a family after the loss of either parent. Beyond the obvious final expenses, the financial strain on a family can be significant, even if the deceased spouse wasn’t working.
The surviving spouse may need to take time off work, or change jobs in order to spend more time with the children. Therefore, your financial plan should include life insurance for both spouses/parents.