Frequently Asked Questions

Not all life insurance policies require a medical exam, but it might be beneficial for you to consider one if you qualify. Why? Well, let’s break it down. Life insurance policies undergo a process called underwriting, where insurance companies assess the risk of insuring an individual. They use statistical data, like actuarial tables, to estimate how long someone of your age, gender, and health status might live. Generally, folks in good health who don’t smoke enjoy the best rates.

Now, here’s where it gets interesting: “simplified issue” policies, as mentioned earlier, don’t require a medical exam at all, while “guaranteed issue” policies don’t even ask health questions. Sounds convenient, right? But here’s the catch: without that medical evaluation, insurers take on more risk, which often means higher premiums. Plus, some folks might not even realize they have a health issue, like high blood pressure, until it’s picked up during a life insurance exam.

The answer to that question depends on the specifics of your policy and the rules in your state. Let’s break it down: with a term life insurance policy, you often get what’s called a grace period – typically around 30 days after the payment due date – during which you can catch up on missed premiums without losing coverage. But if you miss that window, your coverage could lapse.

Now, onto permanent policies: they offer more flexibility. For instance, many whole life policyholders can dip into the cash value, especially during retirement, to keep premiums up to date. And if you have a universal life policy, you’ve got even more options, as it features flexible premiums tailored to your needs.

That’s a great question! While all large insurance companies might seem similar at first glance, they each have their unique qualities. Some are financially robust, while others excel in customer service. If you’re on the hunt for the best life insurance companies, there are some objective measures you can consider like High Financial Strength Ratings and High Customer Satisfaction.  Rhino Insurance partners with a strong portfolio of A+ rated companies, and will find the best fit for you.

When it comes to naming beneficiaries for your life insurance policy, the options are quite flexible. You can choose anyone you like, whether it’s a family member, business partner, charity, or friend. However, if you’re married and live in a state with common property laws, you may need your spouse’s approval to name someone other than them as your primary beneficiary.

Naming children as beneficiaries comes with its own set of considerations. Minors cannot manage money on their own, so if you want to name them as beneficiaries, the insurance company may require you to designate a legal guardian or utilize the Uniform Transfers to Minors Act.

As the policy owner, you’ll be asked to categorize each beneficiary as either revocable or irrevocable. Revocable means you can change your mind later and replace the beneficiary without needing their consent. On the other hand, if a beneficiary is irrevocable, you can’t change it without their permission – the death benefit must go to them if they’re still alive.

Explore optional riders like waiver of premium, which can help maintain coverage if you become disabled, though life insurance normally does not provide disability benefits, there are a few disability specific policies that are pretty affordable.  Disability income insurance policies can pay a benefit for short or long term, depending on the policy.

In the initial two years after purchasing your policy, there’s what’s called a “contestability period.” This means that if the insurance company discovers any misrepresentations or information withheld by you when the policy was issued, they have the right to cancel your policy.

Understand that term life insurance doesn’t accrue cash value, while whole and universal life policies offer cash value growth over time.  Check out IUL’s and the Infinite Banking Concept for cash value and living benefits.

Estimate your coverage using these methods:

• Calculate your Human Life Value: Multiply your current income by about 30 if you’re between 18 and 40 years old, adjusting the multiplier as you age.
• Multiply your income by 10: Add a “0” to your annual salary to estimate coverage needs.
• Include college costs for children: Add $100,000 to $150,000 per child for education expenses.
• Use the DIME formula: Add up your debts, income replacement needs, mortgage balance, and education costs.

Consider a life insurance policy if:

• Other people rely on my income: Whether you’re the primary breadwinner or not, if your absence would cause financial strain for loved ones, life insurance is crucial.
• I have debts that others would inherit: If your student loans, car payments, mortgage, or other debts would fall on loved ones, life insurance can prevent them from being burdened with financial obligations.
• My savings aren’t enough to cover my responsibilities: If your savings can’t fully cover debts or support dependents, life insurance can provide additional financial security.

Death benefits are typically paid as a tax-free lump sum, but beneficiaries can opt for annuity or installment payments.  A death benefit can also be split into more than one beneficiary.  Some providers off an option to select a percentage of benefit to each named beneficiary.

Premiums for “level” Term life insurance remain constant for the term of the policy without change.  Whole life policies remain the same for life, with whole life policies eventually allowing cash value to offset premiums.  Universal Life Insurance can have some flexibility in premiums, where the policy holder can choose to adjust premiums as needed.