Frequently Asked Insurance Questions

Typically, an individual can get up to 20 times her or his annual income in coverage.
The total coverage amount a person will qualify for often decreases with age, as retirement draws nearer.

For those who are not currently employed, it is still possible to get $50,000 – $100,000 of coverage for items such as final expenses. Unemployed individuals will have to provide information on the application to prove they can afford the premiums, such as disability or retirement income information.

It is possible to get more than 20 times your income for coverage if you have additional assets to protect over and above your income. It is also possible for a homemaker to qualify for the same amount of coverage their spouse has, even without a separate income.

Group life insurance is commonly provided by employers as an employee benefit. It provides a lump sum benefit to the employee’s family should they die while employed by the company. Sometimes the benefit can be paid as a pension, but you should check with your employer to see what they provide. Life insurance is life insurance, right? Well pretty much. The benefit is very similar to an individual life insurance policy that you may decide to buy directly from another insurance company. But there are some general similarities and differences.

There is no cost to the applicant to apply for a policy. An application is required to get a firm rate quote. The insurance company pays for the physical exam if one is required. There is no obligation to take out a policy. Once you’re approved for coverage, the term and coverage amount can be changed to fit your budget if the rate comes back higher than expected because of health-related issues.

Medical Exam Tips – Q and A

Q: What is a paramed exam?

A: A paramed exam is a personal interview to collect information about your medical history. This information allows the insurance company to perform a comprehensive evaluation of your current health. The exam usually includes recording of height, weight, blood pressure, and pulse. The exam may also include the collection of blood and urine.

Q: What happens when the exam is complete?

A: The paramed exam is forwarded to the insurance company. Any specimens obtained during the exam are sent to the laboratory and the results are forwarded to the insurance company for assessment.

Q: How should I prepare for my paramed exam?

A: To obtain accurate information, it is recommended that you:

Fast for 8 hours before the appointment
Be prepared with a picture ID
Limit your intake of salt and high-cholesterol foods 24 hours before the exam
Avoid strenuous exercise 12 hours before the exam
Refrain from drinking alcoholic beverages for at least 12 hours before the appointment
Limit caffeine and nicotine one hour before the appointment
Drink a glass of water 1 hour before the appointment
Provide names and dosages of current medications
Have available names, addresses, and phone numbers of any doctors or clinics you’ve visited in the last 5 years
Get a good night’s sleep before the exam

That depends on your needs. A person’s needs change over time. Most term life insurance policies have a premium that increases each year after the initial guaranteed level term period. If you are nearing the end of your initial term period and want to lock in a rate that won’t change for another predetermined number of years, it might benefit you to apply for a new policy and replace, or surrender, the old one.

This depends on what kind of policy you apply for.

Typically a No Medical Exam policy can be applied for, approved, and put in force within approximately two business days. No Medical Exam policies are available to clients up to age 60 or so, depending on the insurance company. The coverage amount you can apply for is limited, due to the greater risk the insurance company is taking. (When there’s no physical exam involved, the insurance company has less health information about the applicant.) For healthy applicants, these policies can cost up to twice the rate of a medically underwritten policy. However, there are people who don’t like needles, and the No Medical Exam option is a great one for that reason!

A medically underwritten, or traditional, term policy will typically take about 3 weeks from start to finish. This process can take longer when applicants have health issues and the underwriter orders medical records from their doctor. If this occurs, we let our clients know that they can call and ask their doctor to expedite the submission of the medical records to the underwriter in an effort to speed up the application process.

Most carriers have the same rules when it comes to paying premiums on life insurance policies. The only way to make monthly payments these days is to authorize a monthly automatic draft from your checking or savings account. If you prefer not to make automatic payments, there are some other options. You can receive a bill by mail if you elect to pay quarterly, semi-annually, or annually. Most people choose to make automatic payments for their life insurance for the same reason they do for other bills, such as car insurance: they don’t want their policy to be cancelled because of non-payment.

You do not have to send a payment with your application, unless you want to be covered during the underwriting process (which typically takes about 3 weeks). Most people choose to wait until their application has been approved to make a payment and begin coverage. Once an approval is made, you can make changes to the policy to fit your budget if the rate that comes back is different from the one you applied for. Also, most people want to know the exact cost before making a payment to begin coverage. You do not have to provide billing information on the application, either. That information can be collected after an approval has been made and you’ve decided that you want to begin the coverage afforded by the policy.

If you want to secure temporary insurance and be covered during the underwriting period, simply include a payment for two months’ premium. It’s refundable if you decide not to take out a policy based on the final approved rate.

Normally, this is not possible. Any time someone wants more coverage, a new application and physical exam are required. Its best practice to apply for the most amount of coverage and the longest term length you want to be considered for. Then, once we have the approval information, you can make changes to the coverage amount or term length as you see fit before beginning the coverage provided by the policy. Typically, changes that involve an increase to the coverage amount or term length can only be made within the first 30 days of the policy. However, you can choose to decrease the total coverage amount or the term length at any time, which will result in a lower premium.

It depends on the pre-existing condition. For example, it’s difficult to obtain life insurance when you’ve had cancer (skin cancer is the one exception) or within 5 years after having a heart attack. On the other hand, it’s fairly easy for people who have high blood pressure, high cholesterol, and/or high blood sugar, such as those with type 2 diabetes, to obtain coverage as long as they are under a doctor’s care and the condition is under control.

There are graded benefit and/or final expense policies available for people with greater health risks. The corresponding premiums will be higher, depending on the severity of the pre-existing condition. It’s often beneficial for an applicant with pre-existing conditions to discuss them with an agent before applying for coverage, to increase the chances of a more favorable approval.

For people who have type 2 diabetes that’s under control, it’s fairly common to get a Table 2 health rating (which is slightly higher than a standard health rating) from most of the larger insurance companies. If you have additional health issues, or your diabetes is more complicated, it could cost more because of the increased health risk. Your best bet is to speak with a licensed insurance agent about your particular situation. An application will be required, as each applicant’s health situation is evaluated individually. Once you have numbers on what kind of coverage you can get for your money, then you can decide if you want to apply for a policy.

Since most women quit smoking and drinking while they’re pregnant, and as a result their health improves, it can often be one of the best times for a woman to apply for coverage. Underwriters take pregnancy weight gain into consideration, so additional baby weight won’t increase the premium you’ll pay. Complications during pregnancy are looked at a little more closely and could increase your rate, depending on the particular health risks involved.

A homemaker will qualify for the same amount of coverage as their spouse, without an independent income of their own. Insuring homemakers is important because of the role they play in raising children. If something were to happen to the homemaker, the spouse who’s the income earner would have to take on an additional burden in terms of childcare and extracurricular activities. That’s the main reason for having life insurance on a homemaker. If the coverage is sufficient, it may allow the working spouse to become the stay-at-home parent if necessary, due to the change in wealth the life insurance benefit has created.