Life insurance is an industry with a lot of laws and complicated terminology. That’s why we work hard to bring simplicity to help people understand and attain the right coverage. Here we’ve compiled a quick list of facts that anyone shopping for life insurance should know.
Always tell the truth on your life insurance application
When it comes to digging up records, life insurance companies might know more about us than we know about ourselves. They work with the Medical information Bureau (MIB) to find out all your health history and run background checks to weigh the risk of insuring you. They can find out everything from the last time you smoked to your last traffic ticket. So in the end, regardless of the rate you applied for, you will get rated according to that companies standards.
If you pay your premium annually instead of monthly you can save an average of 3 to 5 percent every year on your life insurance coverage.
The Medical Exam is free
The medical exam is absolutely free for you and takes place at a time and place of your choosing. Some people put off buying life insurance because they misunderstand the medical exam process. There are also options for no medical exam life insurance.
Every life insurance policy comes with a contestable period
What that means is if there is a death of the insured in the first two years of the life insurance policy the company will investigate, if there is fraud or a mistake determined the death benefit will be adjusted accordingly or unpaid. If the death is a result of a suicide in the first two years, the death benefit will not be paid. After two years the life insurance company is required to pay the death benefit by law no matter the situation.
The company with the best rate on the quote engine, isn’t always the company with the best rate for you
Life insurance companies determine rates by weighing risk. This includes calculating health and occupation risks ranging from height and weight, location and age. If a life insurance company is insuring too many people with your particular risk they may rate you higher than a company that doesn’t currently insure as many people with that risk. All life insurance companies also view certain risks differently.
For example; Say you chew tobacco and you run life insurance quotes online as a non-smoker. You see that Company A is coming in with a lower rate than Company B so you apply with company A. What you didn’t know is that company A will rate you as a smoker while company B will give you standard non-smoker rates. So in turn, you would be better off at applying with company B because in the end you would get a much better rate. That is why you have to be careful to pick an agency that works closely with its underwriters.
Whole life insurance is not the only permanent life insurance coverage
Many people pay more than they are required for life insurance because they are under the wrong impression that whole life is the only permanent option for life insurance. If you know that you need coverage beyond a certain period of your life then you can opt for a Guaranteed Universal Life Insurance policy. This permanent coverage is much more affordable, has level premiums and provides the pure death protection you are looking for.
The death benefit payout is not taxable income
When you die and your beneficiaries collect the death benefit, that money will not be considered taxable income for them.
Your beneficiary’s have to claim the money
If your beneficiaries do not make a claim after your death, they will not receive the money. They have to call your agent or the life insurance company and file a claim along with your death certificate so the proceeds can be paid out.
When your term life insurance policy expires, it expires
It’s a common misunderstanding that once your term is up you have coverage for the rest of your life without continuing to pay premium. That is incorrect. Once the term is expired you have to either renew or convert the term to a permanent policy.
If you have any questions feel free to call us at 888-492-1967, email us, or Compare Life Insurance Quotes Online.