7 Questions for your life insurance agent

Life insurance may be uncomfortable, but a policy customized to your specific needs can help you leave a legacy (or financial security) for your loved ones. If you're considering life insurance, a licensed expert can explain the coverage and riders. If so, try these seven questions to find the proper policy.

1. Which life insurance should I get?

Before meeting with your agent, you may benefit from learning about life insurance types.  Know that the best life insurance coverage fulfills your and your beneficiaries' demands before meeting with your agent. There are two main types of life insurance that you can purchase — term insurance and permanent insurance.

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Term life insurance pays a death payment if you die during the policy's term. (as long as the other term provisions are met). Policies often last 10 to 30 years and are bought to leave money for a child or pay a mortgage. Depending on the policy, a term policy's death benefit may decline or stay the same.

Permanent life insurance covers the policyholder for life. (as long as premiums are paid.) Whole, universal, and variable universal permanent insurance are complicated. Variable and universal insurance has market-dependent premiums and death benefits, unlike standard policies.

2. How much life insurance do I need?

How much life insurance I need is a typical question. It depends on several things. Consider how much money your family needs to sustain their lifestyles. How much debt you have and how long it will take to pay off your mortgage are also crucial. Using a life insurance calculator before meeting with your agent may help you prepare.

Families with unexpected debts like large medical bills must understand their life insurance needs. Your advisor will likely ask you about your debts and financial goals to find the optimum amount for you. Once you know your insurance agent is considering all of your present and future financial needs, you can choose a policy.

3. How much is life insurance?

Life insurance costs depend on many things. Your life insurance agent will need to know your age, gender, lifestyle, kind of life insurance, and medical history, which may require a doctor's exam. These elements help your firm determine your risk. 

Your work, hobbies, and smoking habits can raise your risk and affect your rate. High-risk life insurance premiums are higher. Know how much coverage you need and how much you can pay. Permanent insurance costs more than term insurance, but premiums vary.

4. Does life insurance provide living benefits?

Life insurance is often thought to simply cover death. Many life insurance policies include living benefits including cash value borrowing. Life insurance companies may offer living benefits while the insured is alive. Some life insurance policies include living benefits like:

• Terminal illness: This rider covers medical expenses for terminally ill insureds. Company and policy influence benefit percentage.

• Long-term care: The insured may use their life insurance policy to pay for assisted living if they can no longer care for themselves.

• Short-term care: If the insured is wounded or temporarily impaired, this benefit may cover short-term care costs.

Some of these benefits may be included in the life insurance policy, while others may cost extra. Discuss your living advantages with your agent so they can analyze your possibilities.

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5. What life insurance benefits are guaranteed?

If you die while your life insurance policy is valid, your beneficiaries will usually get the death benefit. Death benefits aren't always guaranteed. Your life insurance company may deny your claim if you commit suicide during the contestability period. (which is usually the first two or three years after policy inception). If your firm found you misrepresented your health during the application process, your claim could be refused.

Most permanent life insurance policies have a cash value component, which may or may not grow depending on the policy. Since indexed universal insurance companies invest in fixed index stocks and options, their cash value can change with the market.

6. When can I expect returns?

This question does not apply to term life insurance. Permanent life insurance takes years to pay off. Not all permanent life insurance guarantees cash value growth. Long-term investments like permanent life insurance are usually bought as a safety net for unexpected life events. 

Payments are put straight to the policy's premium for the first few years, so your insurance may take time to build a cash value or return. Growth may be low, and borrowing against your life insurance policy may diminish your death benefit until you repay it.

7. What if I need more coverage in the future?

Life insurance needs fluctuate with age. Your life insurance policy's terms may alter too. By the end of a term life insurance policy, you should no longer require insurance. If you expect to require life insurance coverage after your term expires, you may want to add a term conversion rider to your policy.

Even if you don't need life insurance now, think ahead. Life insurance for seniors is available, but buying the correct policy when you're young and healthy may save you money. If you wait until you're older and have dependents, you'll pay greater rates.