Around a month ago I received an email from a reader who wanted to share his expertise in the life insurance industry. He's heavily involved in the life insurance industry, which can a big hang up for many people either because they don't want to think about it, or because they aren't sure about the finances regarding it.
Hopefully you find this post helpful. This is not a sponsored post just so you all know 🙂 Hope you all have an awesome weekend, Happy Friday!
Life insurance can be an intimidating subject to tackle for people who may are not familiar with how this particular, often sensitive, kind of insurance works. The basics are easy to understand; when a policy holder dies the beneficiaries are paid based on the particulars of the policy.
But there is a lot more that goes into policies and claims that can be confusing to many people. These are some of the most common concerns that people who are new to life insurance have.
I recommend checking out Policy Genius if you are looking for life insurance.
When Should You Get Life Insurance?
Everyone has a unique situation, so there is no hard and fast rule when it comes to the right age to start looking for life insurance. Generally speaking, people usually start putting serious thought into the matter when they realize that their loved ones financial standing will be severely impacted by their own death.
Spouses, children, and elderly parents are the usual beneficiaries of life insurance policies, and this gives a good idea of who is investing. Of course, it never hurts to plan ahead and get a policy when you’re younger – and most likely healthier. This can lock you into a better policy for the rest of your life, even if your health degrades later on.
What Does the Medical Exam Look For?
Many people are put off by life insurance medical exams because they either do not know what it covers, or they are afraid they will fail the exam outright. The medical exam isn’t much different from a normal physical. The life insurance companies are looking for any outlying factors that may make you more of a risk, so they look at your body mass index (BMI), blood pressure, and take urine and blood samples. When paired up with your questionnaire, family history, and demographic, the life insurance companies will have a pretty good idea of your current health status and any potential problems you might have down the line.
A history of tobacco use can be a big red flag for insurers, and when paired with a high BMI and poor family history it is much more likely to get paired with a low health class. It’s important to note that if your medical exam does cause you to get rejected by one company, which it doesn’t apply to all providers and you’re free to shop around.
Who Can Be a Beneficiary?
If you’re taking the policy out on yourself, you have the freedom to choose anyone to be a beneficiary, – even a group of people. Usually this is a spouse or children, but you could even cut your business partner, best friend, grandchildren, mother-in-law, or favorite charity into the benefits if you wanted to.
If you want to share with multiple people, it’s important to determine exactly how much each person gets rather than saying something like “to be divided amongst my children.” This can lead to tension amongst the beneficiaries if they feel slighted or misrepresented and the last thing you want is your loved ones fighting amongst each other.
Can You Have More Than One Policy?
Of course! You can even take out multiple policies from the same provider. Many people like to take out a whole life policy and pair it with a term life policy, or add a term life policy with more coverage if they plan on traveling for extended periods.
Many people also have a group life insurance policy through their work which is often free for them, but it doesn’t offer much coverage or benefits; adding a term life insurance can drastically increase your coverage and keep the costs low since the group policy still isn’t costing you anything.
What is the Best Provider?
This question opens up a can of worms and in all honesty it cannot be answered fully because everyone’s situation is different. One provider might reject your application, while another approves it, and two can offer drastically different coverage options to the same person. Think of life insurance as a stock. Some providers are more “aggressive” and are willing to risk more coverage on people with a higher risk of dying, while other providers are more conservative and only approve their highest class policies for the healthiest.
With this disparity in the market, it is important to shop around. Just because you got a bad quote from one company doesn’t mean you’re out of luck everywhere.
Liran Hirschkorn is the founder of ChooseTerm.com and is an expert in the insurance industry where he works hand in hand with the best life insurance companies. Feel free to contact him with any more questions you might have.
Do you have life insurance? Why or why not?
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