Commonly Asked Life Insurance Questions
You’ve probably heard a lot of different stories regarding life insurance and why you should have it. If you’ve ever had further questions regarding this form of coverage, you’re in the right place! In its simplest form, life insurance is a contract between an insurance policyholder and an insurance provider where the insurer promises to pay a designated beneficiary sum of money in exchange for a premium, upon the death of an insured person. Depending on what the policy or contract looks like, some other circumstances can prompt payments, like terminal illness. The premium is usually made either monthly or yearly. In some policies, funeral expenses can be included along with other things. Ebensburg Insurance is here to answer all of your questions, so read on for more!
Is Life Insurance Really Necessary?
The answer to this question is not a simple one. Some other questions to ask yourself to get to the bottom of it would be “Is there anyone that is dependent on my income to sustain their standard of living?” If you were to pass away suddenly, would there be people left in your wake that have issues covering costs for your arrangements and subsequently have to change their lifestyle to make up for the loss of income? If this is the case in your situation, you should consider what life insurance could work best for you and your loved ones.
How to Buy Life Insurance?
Before you even consider buying life insurance, make sure you are working with an insurance agency that is licensed and has your best interest in mind. Once you choose this person, there are few things to consider going into your meeting and signing the papers,
How much coverage do you realistically need, how long does the policy need to be, and what can you afford for a premium?
Compare and contrast the different kinds of policies, what they will provide, and decide which one is the best for you.
Review everything carefully before you sign, make sure everything looks accurate
Do not continue your investment in life insurance unless you plan on sticking with the plan you choose as it can be incredibly expensive to back out during the beginning of your policy.
Make sure you understand what is or is not covered when reviewing your contract.
What is the “Free to Look Period” in Life Insurance
If you are new to life insurance policies, you may not know about this. If you just recently purchased your life insurance policy, and have since changed your mind about it, that’s okay! Express this regret to your agent and ask them about their “free to look” period. During this time, you have 10 days from the date the life insurance policy was delivered to review and evaluate the policy. If you decide that you want to return or back out of your policy during this period, the insurance company has to refund any premium you paid and release you from the agreement.
Do Some Companies Accept All the Applications They Get?
When companies say that they accept all applications that are sent to them, it is important to make sure you know what is being offered. A lot of “guaranteed issue” policies ask no health history questions. Offering these policies is a risk for the provider because people with bad health could buy their policies but they mitigate this risk by charging very high premiums or limiting the amount of insurance that can be bought under these plans. In just a few years, these types of policies can cost you more than will be paid out to your policy beneficiaries. Because of all these stipulations, it is important that you know what is covered, what you have to pay, and what the payout looks like when you are choosing your provider and policy.
Should I Get Term or Permanent Life Insurance?
The answer to this question depends on your personal situation and lifestyle. Term insurance offers lower premiums than permanent ones. But, at the same time, term insurance does not build cash value that is available to you in the future. Term insurance policies only cover you for a certain term of years. If you pass within the term, the benefits are paid out to your beneficiaries and they can be renewed for one or more terms as long as you are still healthy, but your premiums could increase.
Permanent insurance policies remain as they are as long as the premium is being paid. On top of that, they have cash value that increases over time. They also allow the policyholder to borrow things against that increasing cash value, like an asset. Because of the savings it can provide, premiums are normally higher for these plans. There are different kinds of permanent life insurance and you can learn more about all of those online.
Make Sure You and Your Family Are Covered
Ebensburg Insurance Agency is here to help you every step of the way. We want to make sure you and your family are covered in the face of an emergency. If you are interested in buying or learning more about life insurance policies, please contact us at your earliest convenience. Give us a call at 814-472-9557 or send us an email at office@ebensburgins.com to schedule a consultation or meeting with us.
