Life Insurance - Frequently Asked Questions

Fundamentals of life insurance

  • How much life insurance do I need?
  • Recognizing that each person's situation is different depending upon their age, income, net worth, debt, lifestyle, desire to leave an inheritance, the number and age of dependents and amount of life insurance provided by an employer (typically not more than 2x annual earnings), here are some basic Guidelines:

    • For people who work, have mortgage or children: 10-15 times your annual income
    • For home caregivers with little or no earned income: $300,000
    • For burial coverage and final expenses only: $10,000 - $25,000
    • For children up to age 18: up to $25,000

    For a quick, easy, and confidential way to estimate your life insurance needs, try our Life Happens Needs Calculator Advice, do not rely solely upon employer-provided life insurance because it's probably not enough and it us probably not portable if you leave or change jobs. Ownership of that kind of policy resides with your employer, not you and that might not be the best situation for your long term family needs.

  • Which initial rate guarantee should I buy?
  • If you are working and have children or a mortgage, we recommend buying cheap term life insurance to cover you until youngest child has graduated from college or until your mortgage debt is paid off, whichever is longer. This conservative approach means that you'll have coverage through the critical period of family life. Make sure to also review quotes for those life insurance plans that now offer early payouts for long term care expenses or a critical medical event such as heart attack or cancer. Those plans are soaring in popularity because that extra protection often costs no more or only a small amount more.

    Let's say that you estimate that your youngest will be out of college in 14 years and that your mortgage has 20 years to go. We'd then recommend that you buy a 20 year initial rate guarantee policy. Once the children are on their own and the mortgage is paid off, you may or may not have a need for life insurance.

    But during the formative, "high risk" years in which you have dependents and debt, we recommend loading up on cheap term life. Families with special needs children should discuss with us their needs because we'll often recommend a lifetime policy in that case.

    If you're looking to have insurance for funeral costs and other final expenses, however, you should consider what's called "final expense" whole life insurance that is available with no exam required and often with no health questions asked.

  • What's covered and not covered on the modern life insurance policy?
  • Modern life insurance policies generally cover death by any cause, at any time, in any place, except death by suicide within the first two years of a policy (one year in some states). An exception to this is a single-peril policy such as an accidental death policy that pays when the death was caused by a covered accident. Accident-only life policies are popular because there is no underwriting and no exam required. Accident is today the #1 leading cause of death for Americans age 1-45.

  • What is the difference between term life, whole life and universal life insurance?
  • Term Life insurance is designed for people who want coverage for a set number of years, normally 10-30 years. Premiums stay level during the initial rate guarantee period. Term life is designed replace lost earnings of a family breadwinner and is thus very popular among parents. Term Life is economically-priced because it pays only if the insured dies; there is no cash value buildup..

    Whole Life (and Universal Life) insurance are generally designed to provide a level amount of coverage at a guaranteed rate for the entire life of the insured. Whole Life accumulates cash value over time while Universal Life can be setup to have cash values or no cash values. Right now, a version of Universal Life that offers level premiums and coverage for life with no cash value is very popular with life insurance buyers.

    "Final Expense" insurance is a popular form of whole life coverage that is sold in amounts up to $25,000. This kind of policy is designed to pay for burial and other final expenses. Final Expense coverage typically does not require medical underwriting; some policies require medical questions while others have no medical questions and are known as guaranteed-issue.

  • What is the difference between "guaranteed issue" and "accidental death" insurance?
  • 'Guaranteed Issue' means there are no health questions or exams to obtain a policy.

    'Accidental Death' is a type of life insurance that pays only if you die as a direct result of an accident.

  • What are the differences between life insurance companies? Why are some less expensive than others?
  • Life insurers compete through underwriting strategies based on factors related to the health and lifestyle of applicants.

    So, a customer with certain characteristics might find that one company to be the least expensive option, while another customer with different characteristics would find a different company to be the least expensive.

  • What does "waiver of premium" mean?
  • Waiver of premium means that, if you are unable to pay your premiums due to permanent or total disability, the premiums are waived for a certain period of time. Each company has their own standards for waiver of premium.

  • I have employer-paid life insurance at work. Why should I buy a personal life insurance policy?

    Today, 108 million Americans are covered under employer-provided life insurance vs. 102 million who own personal life insurance policies. What's wrong with this picture?

    Take a look at 4 major pitfalls of relying upon employer-provided life insurance include:

    • Dangerous Underinsurance. Most employer life insurance plans provide 1 or 2 times a person's annual salary in benefit, yet most financial planners recommend a minimum of 10x your earnings in life insurance coverage. Leaving your loved ones with only one year of earnings seems almost cruel.
    • No Portability. If you leave your job, as most people do at some point, your life insurance melts away and stays with your former employer. In most cases you cannot take it with you or convert the group policy to an individual policy.
    • Lack of Convertibility. The ability to convert a personal term insurance policy into a permanent life insurance policy without medical exam or medical questions is a Godsend for insureds who become ill and uninsurable on the open market. Convertibility is a key feature of term life insurance and may not exist at all in an employer-provided life insurance policy.
    • Loss of Control. An employer-provided life insurance policy is just that i.e. it's owned and controlled by your employer and can be taken away or modified at any time. You can choose your beneficiary but that's about it.

Applying for coverage

  • Should I get coverage for my spouse if he or she is not working outside the home?
  • Yes, in almost all cases. A non-working might not produce income, but he or she should die, there will often be a need to pay for childcare, funeral arrangements, and other final expenses. Typically, a non-working spouse can purchase 50%-100% of the life insurance benefit of a working spouse, but underwriting rules vary by company.

  • Am I eligible for life insurance even if I'm a homemaker?
  • Yes, you are eligible for coverage. Please review the illustrated acceptance guidelines after you complete your profile.

  • Should I get life insurance for my children?
  • There are several reasons to consider buying life insurance for your children.

    First, while the mortality rate for children is low, you'll want to have money for final expenses should they tragically fall victim to an illness or accident.

    On the brighter side, policies for children are often whole life policies that build cash value, which can later be accessed for college or given as a gift when they become adults. Some child policies allow coverage to be increased without proof of insurability.

    You may find it convenient to add a child "rider" to your own policy when you apply for coverage. All eligible children can generally be covered for one price.

  • Can I purchase life insurance on my parent?
  • Sure, as long as these conditions are met:

    • The proposed insured is made aware of the purchase;
    • He or she can read English and has the mental capacity to understand what is being transacted; and
    • He or she knowingly signs the application.

  • I've had some health issues. Can I still get life insurance?
  • Yes, we have something for everyone, regardless of your health history. Just go to rate.lifequotes.com and click 'View Quotes Now' to get quotes tailored to your specific situation.

  • How do I apply for a policy?
  • You've already taken the first step by coming to www.LifeQuotes.com.

    Click "View Quotes Now," start your application, and click for a price comparison among our 50 different companies. You can complete your application online or call us to speak to one of our licensed agents.

    Once you've completed the application you'll be assigned to a LifeQuotes employee who will assist you.

    You've already taken the first step by coming to LifeQuotes. We have a simple three step process to start an application right here on the website. Generate a quote, choose a plan and then start an application. You can get a quote and complete your application by going online to rate.lifequotes.com. Click 'View Quotes Now' to get a price comparison of our 50 different companies. You can apply online or call us to speak to one of our licensed agents. Once you've completed the application you'll be assigned to a LifeQuotes employee who will help and guide you through the process.

  • Do I have to take a medical exam?
  • Not necessarily. We have many no-exam options available for those who don't have the time or don't want to take a medical exam.

  • Do I need to provide my medical information?
  • Yes. All life insurers underwrite coverage based upon an applicant's health history; most will require access to your health records.

  • Will being pregnant make a difference in my application for insurance?
  • Yes. Some companies may not offer coverage until you have given birth.

    Of those companies that might cover you, you need to know that:

    • Your quote will reflect your weight when you apply, and
    • Pregnancy can affect your lab results, resulting in a higher price.

    Please contact us if you are pregnant, and we will review your options.

  • The application asks me for a driver's license number, and I don't have one. What do I do?
  • It's okay to enter "N/A" (Not Applicable).

  • Can I complete a "no exam" application for someone else?
  • No, the person seeking coverage must complete the application himself or herself. This can be done online or over the phone with an agent.

  • How can I apply online for someone from out of state?
  • Generally, you shouldn't.

    Every applicant should complete his or her own application because:

    • Insurers require responses in the first person;
    • The application becomes a permanent part of the policy; and
    • Answers are considered to be warranties of accuracy.

    Only under rare circumstances can one person buy life insurance on another. Even then, the insured person must be available to answer questions.

  • Can I list anyone I want as the beneficiary?
  • A beneficiary must have an insurable interest in your life.

    That is, a beneficiary must be someone who would be negatively impacted financially in the event of your passing. This includes, but is not necessarily limited to, your spouse, child, or other family member who is financially dependent on you.

  • I don't see where to add a contingent beneficiary.
  • Once a policy is issued, a policyholder can, at any time, establish or change contingent beneficiaries, who are paid only if primary beneficiaries are not living at the time of an insured's death.

    This online application does not have a contingent beneficiary section; the paper version does. We advise that you complete the application and submit to underwriting. Once the policy is issued, we can provide a beneficiary change form.

  • Do I have to get two separate policies if I want both my boy/girlfriend and children as beneficiaries?
  • Most companies will allow you to do this either with one policy or two. It's entirely your choice.

    Since life insurance pricing is a bit like buying in bulk, you may save money by purchasing more coverage under one policy and splitting the death benefit among the different beneficiaries.

  • Can I get the price listed on the flyer I got through the mail?
  • Yes, the sample rates shown in our ads are real and available to applicants who have no ratable health or lifestyle issues. Prices are based on age, gender, health, and lifestyle details.

  • I want to complete an application.  How do I choose a company?
  • We provide as many options as possible, but all of our carriers are very highly rated with A.M. Best, Standard and Poor's, and other rating agencies. Any one you choose will have an excellent reputation.

    Most people choose the company that costs them the least, but the choice is entirely up to you.

Awaiting approval

  • How long does it take to get new life insurance?
  • It varies from company to company, but rarely more than 30 days.

    Some companies that do not require paramed exams can issue policies immediately for healthy individuals seeking less than $500,000 in coverage. Also, most life insurers provide coverage during the underwriting period, as soon as an application is signed.

    It can take longer than 30 days for final approval if medical information must be obtained from several sources.

  • Do I have coverage while I am waiting for my policy?
  • Generally, yes.

    Most companies offer a Temporary Insurance Agreement (TIA) or Conditional Coverage. If you choose to apply for the TIA/Conditional Coverage, are eligible for the coverage, and remit payment with your application, you can be covered during the underwriting process.

    Some of the no-exam or instant-decision products do not offer this feature. In that case, our application will have details of the terms and conditions of any temporary coverage.

  • What is an "initial rate guarantee period" on a term life policy, and what happens when it ends?
  • When you purchase a tem life policy, your premium will typically be guaranteed for a defined period of time. When that period ends, a policyholder typically has these options:

    • To let the policy lapse;
    • To continue the coverage for a higher premium;
    • To continue paying the same premium for less coverage; or
    • To convert the policy into a permanent policy.

    Most importantly, the last three options can often be exercised with no medical exam. Given that, we advise that you consult a reliable life insurance agent. Never allow your coverage to lapse without doing so.

  • Once I'm approved, will the insurance company immediately draft the premium, or will I be notified first?
  • If approved at the rate you applied for, you can expect a draft to be made immediately against your account.

    If the price is going to be different from what you applied for, the insurance company cannot draft. LifeQuotes will then notify you of the new price and discuss your options.

  • Will the price change from the quote that I see on your website?
  • To get a policy issued at a requested price, make sure you meet the 'Acceptance Guidelines' on our illustration. The insurance underwriters will then review your file and make the final determination regarding price.

    Once a policy is issued, the prices cannot change during the initial rate guarantee period.

The role and value of LifeQuotes

  • Why should I buy through LifeQuotes?
  • With something as important as life insurance, you need an advocate working for you. That's what you get with our 32 years of experience under the same management, 90 insurance professionals, and 330,000 sales.

    Whether you need $5,000 or a $25 million in coverage, we have the expertise to give you sound, unbiased advice so you can have peace of mind. We have held an A+ rating with the Better Business Bureau (BBB) for over 10 years.

  • What companies does LifeQuotes represent?
  • We represent 50 leading life insurance companies, far more than most insurance agencies. Our selection ensures that you will pay the least amount of money for a life insurance that best meets your needs.

    Our carriers include:

    • American General Life (AIG)
    • Banner Life
    • Gerber Life
    • John Hancock
    • MetLife
    • Mutual of Omaha
    • Pacific Mutual
    • Protective Life
    • Prudential Life
    • Transamerica Life
    • William Penn
    • and many more.

  • How can I find quotes for life insurance?
  • For personalized quotes, go to rate.lifequotes.com, and click 'View Quotes Now'.

    You will be asked to provide your height, weight, and age, then asked some questions regarding your smoking, health, and lifestyle. Please answer all questions, and you will be able to view all available quotes. You can even complete the application online.

  • Can I apply directly to the company for coverage?
  • The 50 companies available through LifeQuotes sell through independent agents. Very few of them sell directly to consumers.

  • I would prefer to complete an application with an agent over the phone.
  • Please call 1-800-324-6370.

  • How do I apply for me and my spouse? Would it be better to go to the insurance company directly, or apply online at rate.lifequotes.com?
  • There are important benefits to applying online or by phone with LifeQuotes.

    First, many of our companies do not sell directly to consumers. By using us, you are able to compare many different companies and plans, to ensure you are getting the best option you. If you go directly to an insurer, it may only have one or a few plans to offer.

    Secondly, our experienced support staff can help you through the process, answering your questions and alerting you to important considerations you may not be aware of.

  • Where on the website can I see "return of premium" plans?
  • Return of premium plans are listed at the bottom of each term policy option. Each plan will have 'Return of Premium' or 'ROP' in their plan title.

  • Where can I see the whole life plans?
  • We automatically provide whole life quotes on all requests. When you get to the screen that displays quotes, see the quotes under the tab called, 'LifeTime Plans'.

  • Do you have a term life policy that allows me and my spouse to be fully insured on the same policy?
  • No, you and your spouse would have to apply for separate term policies for each of you to receive the full amount of coverage. Some policies offer 'spousal coverage' riders but those riders are often for small amounts of coverage.