You have questions about life insurance. We have answers.
Life gets tricky sometimes, but life insurance should not let you scratch your head. This guide gives you clarity with answers to the 11 most common questions about life insurance.
1. How does life insurance work?
- You pay the life insurance company for coverage.
- You have one or more beneficiaries.
- The recipients will receive a payment after you die. This payment is called a benefit.
2. How do I choose beneficiaries?
Who needs the benefit after you are gone? Is it your spouse, partner, children or grandchildren?
You should mention more than one beneficiary if one of them passes away before doing so.
You have several options for where the benefit goes and how much is received.
Here is a quick example:
- Your husband is the main beneficiary. He gets 100% of the benefit.
- Your son is a secondary beneficiary. He gets the benefit if your husband can not.
- Your cousin is a tertiary beneficiary. She gets the benefit if your husband and son can not.
You can also divide the benefit into three ways, which means that your husband, son and cousin would each receive ⅓ of the total benefit.
Minors can not directly receive life insurance benefits. Everything is a matter of legality. Enter a trust as a beneficiary if you want a minor to receive the payment. In this way, a guardian will review the money until the minor turns 18 years old.
You can also transfer the benefit to a charity.
3. How do I qualify for coverage?
The answer depends on which insurance you are applying for.
We will use our simplified life insurance as an example. We approve your coverage based on answers to quick health questions.
Most other life insurance policies require a medical examination, which is done by a licensed healthcare professional.
The test works like a regular physical where you:
- Answer health questions
- Give a urine sample
- Give a blood sample
- Measure your height, weight, heart rate and blood pressure
You may need to take an ECG if you are claiming a large benefit or if you are a certain age.
4. Why does a life insurance company need my medical information?
Your age and medical information are used to approve or reject your application. What happens if you get the green light?
Your health information places you in a classification that determines the premium you pay for life insurance.
5. How do I prepare for the medical examination?
Follow these tips to have a good life insurance test:
- Fast if possible 8 to 12 hours before the exam
- Schedule the test early in the morning to make fasting easier
- Do not smoke or drink caffeinated beverages in advance
- drink a lot of water
- Do not practice the day of the exam
Avoid the following things 12 hours before the exam:
- Nasal decongestants
- Pain medication
Have the following information at hand:
- Names, addresses and telephone numbers of consulting doctors
- Names and doses of current recipes
- Your medical history:
- Medical conditions
- Diagnosis date
- Treatments and treatment results
- Treating physician
6. Does life insurance have exceptions?
Yes. Life insurance has exceptions.
A claim can be rejected when a policyholder:
- Die of suicide
- Does not reveal important information about the application
- Does not pay insurance premiums
7. How much life insurance do I need?
Google this question. You will find many different answers!
Some sites say you should have 10 to 12 times your annual income in coverage. Other sources give you an overview and point you in the right direction.
That’s what we’re here to do.
Think first of your financial obligations as:
- Car payments
- Cost of living
- Disbursements of university loans
- Funeral costs
How much would it cost to cover these items?
Do you want to leave money behind for a child or grandchild? Sit down with them to talk about their own bills and living expenses.
Combine your financial obligations with how much you want to leave behind. It should give you a solid ballpark.
8. I have life insurance through my job, but is it enough?
Your employer can provide enough life insurance to cover one or two years of your salary. That’s a good start, but let’s say you’re leaving your job.
Your group life insurance will either:
Exit, giving you no coverage, or;
Continue if you can turn your plan into a personal policy.
Maybe you will stay in your current job until retirement. Is your current coverage amount sufficient?
It is legal to have more than one life insurance policy. You can trust an independent agent to help you choose the right policy after you have decided how much coverage you need.
9. Is life insurance taxable?
Usually, the beneficiary will not pay tax. If the benefit goes to an estate, the income will be subject to property tax.
Some insurance companies offer to keep the life insurance income after the death of the policyholder. The benefit receives taxable interest when this happens.
10. How does the life insurance company find out about my death?
A beneficiary or lawyer will file a claim with the insurance company.
Your beneficiary or lawyer would call 800-371-9622 to file a claim with Pekin Life Insurance Company.
11. Can I add insurance to my life insurance?
Pekin Life Insurance Company offers several coverage enhancements for your insurance.
This improvement allows you to use part of the life insurance benefit to pay for long-term care expenses. This is available on permanent life insurance.
Take a look at these monthly long-term care costs with the permission of 2018 Genworth Cost of Care Survey:
- Adult Day Care: $ 1,560
- Home care: $ 4,000
- Home Map Services: $ 4,004
- Home Health Care Assistant: $ 4,195
- Private room for nursing home: $ 8,365
- Semi-private room for nursing home: $ 7,441
These costs will continue to increase.
Compensation in the event of an accident
This benefit can provide additional payment for deaths caused by accidents. It works well for anyone who works in a high-risk environment or drives more than the average person.
Here are more things to know about the benefit of accidental death:
- It ends at age 70
- Coverage does not extend to deaths caused by acts of war or illegal activities
- Risky hobbies such as skydiving are also excluded
You may think that catastrophic injuries cause most disabilities. However, fractures, sprains and muscle sprains are only the fifth leading cause of short-term disability claims.
Pregnancies, musculoskeletal disorders and indigestion are more likely to make you miss work.
This is where the income improvement for the disabled comes in. It replaces part of your income when a disability keeps you away from your profession.
This improvement is available on permanent life insurance policies.
According to the Insurance Information Institute (III), consumers lost nearly $ 1.48 billion on identity fraud in 2019.
Pekin Life Insurance Company offers identity theft protection free of charge to our policyholders.
This plan gives you access to a specialist in identity fraud who:
- Works with you to stop fraudulent bills and fees
- Works with government agencies and creditors
- Helps you prepare message materials
- Provides identity theft victims with one year of free fraud monitoring services
Do you have more questions about life insurance? Are you considering applying? If you need more help, contact your local, licensed Beijing Insurance Agent today!