• What is a graded benefit life insurance policy?

    A graded benefit life insurance is method insurance carriers use to offer coverage for individuals who aren’t in the best of health and otherwise may not qualify for coverage by limiting the death amount payment should they die in the first two or three years.

    For instance, if you bought $10,000 in coverage, a company will pay 40% if you died in the first year, 75% in the second year, and only in year three onwards will your beneficiaries be entitled to the full amount. When buying this type of coverage, you need to proceed with caution and first try to get a level benefit plan, which has no waiting period.

  • 15. Do I Need Life Insurance on My Child?

    This depends on who you ask and what they are attempting to sell you. A child’s policy can provide a saving vehicle, the ability to buy more coverage in the future without proving insurability and also pay the death benefit in the event of a child’s death, which can be used for burial expenses.

    However, most child coverages aren’t large enough to begin with (maximum benefit is typical $25,000), and they aren’t supporting a family financially, so none depends on them. Besides, cases for a child’s death are very slim, statistically, and although it may be the most tragic experience, life insurance won’t really help.

  • Should I Buy No-Questions-Asked Life Insurance?

    “No-questions-asked life insurance”, also known as guaranteed issue life insurance, is a policy which ensures your acceptance regardless of your current or past health challenges. There are three caveats to these plans.

    Firstly, there is a graded benefit clause which will not pay the full death benefit amount should you pass away during the first two policy years. Secondly, these policies are overpriced, and the maximum death benefit will not exceed $40,000. Thirdly, you must be between the ages of 40 and 85 to qualify for guaranteed issue plan, so if you are younger than 40 years old, you will not be able to purchase these policies.

    Here is my advice: You should never, ever buy guaranteed issue coverage unless you’ve exhausted all other options and you can afford premiums.

  • How Long Does It Take to Get My Policy?

    That depends on the insurance company and the type of coverage that you applied for. Generally speaking, the underwriting process for a traditional, fully underwritten process can take anywhere from two to eight weeks. A no-exam or final expense policy can be issued from a few minutes after submission to about two weeks. The delivery time is about a week after the policy’s approval.

  • Do I Need to Take an Exam?

    If you apply for a traditional policy, then yes, you will have to undertake the exam. However, there are a few companies who offer up to one million dollars of life insurance coverage without the need to go through an exam. Additionally, policies such as final expense are approved on a simplified issue basis, and do not require you to take the exam.

  • Why Do I Need to Take an Exam?

    Would you buy a cat in a bag without checking it first? After all, insurers are on the hook for millions if you die soon after getting the policy. They increase their odds by conducting an exam and consequently decide how risky you are to insure. Additionally, they make sure not to insure the unqualified individuals who may have a terminal illness or otherwise are likely to die soon.

  • What Do the Insurance Companies Test For?

    A third-party nurse will go over the questions you answered on the application and record your pulse, blood pressure levels, height and weight, and also take a blood sample. Sometimes, depending on your age and the company, a urine sample and EKG will also be required.

  • What Is a Beneficiary?

    A life insurance beneficiary is an individual, entity, trustee, or estate named by the policy owner to collect the death benefit proceeds upon the insured’s death. There are two types of beneficiaries:

    1. Primary beneficiary: The first one in line to collect the death benefit upon the insured’s death.
    2. Contingent beneficiary: Also known as a secondary beneficiary, is the second one in line to collect the benefit if the primary beneficiary is deceased.

  • What Is Final Expense Life Insurance?

    Final expense life insurance refers to specific protection individuals purchase to cover charges and affairs that are associated with your such as burial, funeral service, or final medical bills. Final expense policies are whole life with a fixed premium amount that lasts for as long as the insured lives.