Life insurance is primarily a way to provide for their loved ones’ financial future in the event of their death. It makes sense that you would want to do this in the most cost-effective way possible, assuming that coverage amounts and other requirements are met.
A life insurance policy is designed to offer protection against the risk of death from an accident, old age, a serious health condition or a life-threatening ailment. It provides coverage or protection on your life, for a specified term or a defined time period, as long as premiums are paid timely.
Life insurance is crucial to ensure your dependents are well taken care of if you suddenly die. Life insurance is a complex topic to discuss as there is much to consider, particularly your mortality.
However, you and your dependents will be better off if you ask critical questions about life insurance and get the answers you need before taking out a life insurance policy. Since men often die first before their spouses, their life insurance policies are the ones that get used by their dependents. Not only that but since men are still generally the primary providers for the family in terms of core earning ability, the disruption that this would cause financially could be devastating.
There are many questions to ask about life insurance, including:
How Much Life Insurance Do I Need?
The answer to this question is quite complicated. However, there are two main answers to consider. You need enough life insurance to pay off your debts and for your dependents to maintain the same standard of living after you are gone.
Therefore, you will need a conclusive evaluation of your financial situation before taking out a life insurance policy. Only then can you have an accurate account of your dependents’ financial obligations after you die.
What Is Term Life Insurance?
A term life insurance policy is a good option for those who have a specific need for coverage in a very limited amount of time. For instance, if your goal is to pay off your mortgage in the event you are involved in an accident so that your spouse and family won’t be forced to sell it.
Term insurance premiums are generally lowest when you are young and will increase over time. When you hear people talk about needing blood tests or physicals, this is generally in relation to the company needing the balance the term insurance death benefit and other coverage items against the odds that you will pass away earlier than expected.
Why Permanent Life Insurance or Whole Life Insurance Might Be A Better Choice
A permanent life insurance policy may have higher premiums but they act as a financial savings product that will pay out a death benefit when you pass away. However, it also offers maximum flexibility in that the money you invest will be tax deferred and this allows the policy holder to actually use it to borrow funds against.
With policies from most companies, this means that not only will it help provide financial security after you pass away, but it can actually help you through times of your life when credit is shaky. For instance, the cash value can be used as collateral for a loan and should you die before the loan is repaid, the permanent insurance company will repay any money owed before disbursing the remainder to your beneficiaries.
How To Choose The Right Kind Of Life Insurance Policy
With a basic understanding of the two different main types of life insurance policies, it is time to determine which is best for your needs.
- Are you looking to simply cover death benefit items, or are you looking to have money to potentially pay for your children’s college tuition or your partners retirement should you pass earlier than expected?
- Are you looking to be able to take money out of your policy at some point and evaluate it based on cash value or are you simply looking for a policy should something unexpected happen?
- Do you expect your needs to change over time?
These are all questions that one should ask themselves as well as discuss with their partner before choosing a life insurance policy. These are all individual decisions and there’s no right answer but whatever your choice is, will ultimately determine if you need a term policy or whole life policy and what other features you will need to have as part of whatever insurance you select.
What Questions Should You Ask Your Agent Before Signing a Life Insurance Policy?
A life insurance agent needs to be someone you trust. In many ways, talking about death and dying can be among the most intimate conversations that any man will ever have. You will clearly want to have these discussions about final expenses and how much coverage you will need to help keep your family from having financial difficulties should the unexpected happens. Because of this, your insurance agent is responsible for more than just presenting options and finalizing paperwork.
Many of the questions presented in this article are the same you should be prepared to ask your agent, but additionally you should be prepared to ask him (or her) about the background of the company behind the policy and if they maintain the policy themselves or are simply a broker or if you can work with them for future questions and adjustments as your needs change.
Are There Hobbies That Increase My Life Insurance Premiums?
As a man, hobbies are important. They make life fun and give it meaning, but some hobbies are quite dangerous.
Life insurance premiums will depend on how likely you are to die. Therefore, if you have high-risk hobbies, you have a higher risk of death than someone with different hobbies. Your insurance premiums will, in turn, go through the roof.
If they aren’t your coverage may be contested just when your family needs it most.
You will have two alternatives. Give up your high-risk hobbies in favor of lower premiums or continue your pursuits and accept the price of life insurance.
This is particularly important when you consider term life insurance and any man who is involved in dangerous activities should make sure to check their policy to make sure there are no exceptions and that any hobbies or dangerous activities are explicitly added to your policy.
Is Life Insurance Taxable?
A common question to ask about life insurance is whether life insurance is taxable. The answer is that it depends.
If you clearly name your beneficiaries in the life insurance policy, they will not have to pay taxes on the benefits they receive from your life insurance policy. The income from a life insurance policy is not deemed to be taxable income by most tax authorities.
There are situations when your beneficiaries will pay taxes on the benefits from a life insurance policy. One of them is when the money your dependents receive comes from investments or interest directly from life insurance.
The beneficiaries of your life insurance policy will also have to pay interest if you leave the benefits to your estate. The good news is that your dependents can avoid paying the above taxes if they know what to do.
Are There Life Insurance Policies For Diabetics?
The simple answer is yes; there are life insurance policies for diabetics. However, people with diabetes will often get term life insurance policies as opposed to permanent ones.
If you have diabetes, it will definitely affect your life insurance policy. As a person with diabetes, you have a higher chance of premature mortality and will pay more for life insurance.
You will be best served by searching for an insurance company that offers life insurance explicitly to people with diabetes. There are also life insurance policies specifically designed for people with diabetes.
Do You Need to Get a Blood Test for Life Insurance?
When you want to get a life insurance policy, the insurance provider will evaluate your health. So, yes, a blood test will be necessary for life insurance.
A blood test reveals much about your health, which will affect various aspects of your life insurance policy, including how much you pay in premiums. If you make healthy life choices, you will benefit from more favorable terms in your life insurance policy. Vice versa is also true.
After going through these five questions, you will be able to decide for yourself if that million-dollar coverage offered in the ad is really what you need to provide for you and your family. If it’s not, don’t be afraid to pass it by—there are hundreds of policies waiting to provide you with the peace of mind you’re looking for.
At the end, there are many questions you should ask insurance providers about life insurance. The questions above are only the tip of the iceberg. Take your time to come up with as many questions as possible and ensure your insurance provider answers them all.