Frequently Asked Questions

Navigating life insurance policies can feel overwhelming, but finding answers to common questions can provide clarity. Whether you’re curious about the different types of coverage or how death benefits function, exploring frequently asked questions about life insurance can shed light on various aspects of this important financial tool.

Do life insurance policies require a physical exam?2024-02-19T03:35:52+00:00

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.

What happens if I’m late on a payment or can’t pay?2024-02-19T03:39:54+00:00

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.

How do I know if the insurance company reputable?2024-02-19T03:44:13+00:00

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.

Who should be the beneficiary? Can I change beneficiaries?2024-02-19T03:46:07+00:00

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.

What’s covered if I become disabled?2024-02-19T03:28:51+00:00

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.

What is a Permanent Policy?2024-02-19T03:48:50+00:00

A permanent policy offers lifelong protection and the opportunity to accumulate a tax-deferred cash value. With this type of policy, a portion of the premium goes towards building up a cash value over time. This cash value can serve various purposes, such as allowing you to take out a loan against it or using it to pay premiums once your policy is fully paid up.

What is the “Contestability” Period?2024-02-19T03:50:58+00:00

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.

What are Life Insurance Riders?2024-02-19T03:55:56+00:00

Life insurance riders are like little extras you can add to your policy to tailor it to your specific needs. Think of them as customizable features that enhance your coverage. While some riders are included with your policy at no extra charge, others are optional additions that you can purchase when you buy your policy. It’s important to keep in mind that riders cannot be added after you’ve already purchased your policy. Here are a few common riders that you can choose to include:

  • Waiver of premium
  • Disability income
  • Term conversion
  • Accelerated death benefit
  • Child’s term life
  • Accidental death benefits rider
  • Return of premium (ROP)
Does the policy provide cash value (also called “living benefits”)?2024-02-19T03:24:09+00:00

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.

What other types of life insurance can I choose?2024-02-19T03:20:11+00:00
  1. Final expense insurance
  2. Mortgage Protection
  3. Critical Illness 
  4. Decreasing Term
  5. Accidental Death

There are numerous options and possible solutions.  Consult our professionals to discuss and consider all the aspects and tailor a solution for you and your family’s needs.

What are the three main types of life insurance?2024-02-18T02:15:21+00:00

Explore term life, whole life, and universal life policies:

  • Term life insurance offers temporary protection for a set period, typically 10 to 30 years.
  • Whole life insurance provides permanent coverage with cash value accumulation and potential dividends.
  • Universal life insurance offers flexible premiums and cash value growth.
How much will the policy cost?2024-02-18T02:06:30+00:00

While actual policy costs may vary, life insurance quotes offer a starting point for understanding coverage needs and potential expenses.  Request a Quote with one of our professionals.  Instead of one quote from a calculator, our underwriters with search more than 3 dozen insurance providers and tailor a policy to your needs.

How much life insurance do I need?2024-02-18T01:56:58+00:00

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.
Do I need life insurance at all?2024-02-18T02:00:48+00:00

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.
How are death benefits paid?2024-02-19T03:27:18+00:00

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.

Will my premiums change over time?2024-02-19T03:32:56+00:00

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.

Ryan Ossola

Insurance Agent

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