Get answers to many of the frequently asked questions about life insurance. Life insurance can be a complicated subject, but our FAQs will answer many of the top asked questions we get everyday. And if you don't see a question listed on our site, please give us a call at 281-451-0194 and we will be more than happy to answer any questions you have.
Whole life insurance is permanent life insurance designed to protect you "for the whole of your life". Basic whole life insurance consists of two internal parts: a protection element (the term insurance component) and a savings element (popularly known as cash value). These two parts work together to guarantee the policy will last until death and pay a death benefit. As with many products, there are many variations of whole life available on the market today.more
Cash Value is the popular term for cash accumulating within permanent life insurance policies like Whole Life (in all its forms) and Universal Life (in all its forms). Though somewhat different, cash value (surrender value) can also accumulate in the later years of Return of Premium Term Lifemore
This question is coming up more and more as members of the "sandwich generation" deal with aging parents. You can buy life policies on your parents almost anywhere.
In most cases, the parent you are insuring will have to give consent to be insured by signing the application. There are a few cases where you could take out the policy on them without direct consent but, to do this, you would need a formal "Durable Power of Attorney". Carriers that allow you to sign as POA, are usually guaranteed issue carriers so make sure you know what you are buying.more
First off, don't lie on a life insurance application. Carriers are experts at finding information. You almost need to look at health questions as an exam about your health that you are trying to pass. Assume the carrier knows or will know all about your health.
If a lie is discovered on an application, the carrier will try to determine if it was simply an agent error or a misstatement by the client (in other words: not a lie). If the explanation is reasonable, the carrier will usually correct it and proceed to process and issue the policy. If the carrier determines that the...more
To answer this, I am going to substitute "permanent" for whole life. So, when should you buy a "permanent" policy. Unfortunately, like so many thing in today's world, this has been unnecessarily complicated by agents, TV/Radio personalities, and others...and it shouldn't be. It is really pretty simple.
BUYING LIFE INSURANCE
If you are buying life insurance to cover something temporary (like a mortgage, auto loan, or educational expenses, etc), a term policy is an appropriate vehicle. Please understand that term almost always lapses (terminates) without paying a death claim and...more
In most cases, no. Believe it or not, it is hard to "fail" or "get declined" a life insurance policy. Carriers want to issue you a policy because they want the premiums. If you have high cholesterol or high blood pressure controlled with medication, the carriers barely give it a second look. Control is key. In fact, you can even still get "preferred" status in those cases. So, if you have minor/moderate health issues, my advice is to take the exam and get your coverage. If your policy comes back rated, the face amount can be adjusted to fit the premium you want to pay.
If you have...more
Honestly, it depends on which one you own and why you bought it.
Most of the AARP policies I run into are what they call the Level Benefit Term Life which is a 5-year renewable term policy. This policy “renews” every 5 years with a corresponding rate increase and eventually lapses at age 80 if not converted to a permanent plan of insurance.
So, if you own this policy and bought it to cover an auto loan (or something else short-term) or have no intention/need of keeping it for the long term and are aware of the rate increases, then I have no real beef with this...more
In short, yes. There are many valid reasons to own more than one life insurance policy. People can have life insurance needs that run the gamut from individual needs to business insurance to estate planning to final expenses. The list is almost endless. In fact, the variety of uses for life insurance practically necessitates owning more than one life insurance policy.more
Do they ever! Yes! Just because someone doesn’t earn a living outside the home does not negate the need for life insurance. Think for a moment: Can you imagine having to replace the duties provided by your stay-at-home spouse? Child care, housekeeping, meal preparation, organizing children’s schedules/activities and anything else you can name are more than a full-time job. Hiring people to fill that role in the event of his/her death would be astronomically expensive. Life insurance is an inexpensive way to make sure money will be available when and if it is needed.more
First off, did you realize term policies end? Term Life Insurance policies are designed to cover a specified period of time (usually 10, 15, 20, or 30 years). Once the term has run out, they are designed (and expected) to lapse (end). How it actually happens depends on the company you have your policy through.
For most companies, the policies become an ART (annual renewable term) and explode in price (10-20 times the original premium is not uncommon). They also increase in price each year thereafter. Very few people keep the policy in these circumstances and most policies lapse....more
Being someone who has actually collected on a critical illness policy, I may be a bit biased here. That being said, when I am speaking with people about this need, I always focus on a couple of items:
A “yes” answer to either of those questions constitutes a need for this coverage. To me, a more important question is whether to buy critical illness coverage as a stand-alone policy or get a life insurance policy that covers it through living benefits (or both). A...more
This should be an easy answer, but it isn't. All agents must be licensed in the state where they conduct business. That said, a license doesn't mean that they are necessarily a "good agent".
Look for agents who are "career" types. While not always the case, these agents often carry industry designations such as CLU®, CFP®,LUTCF®, or ChFC® and the like. These designations are earned by taking college level courses that specialize in life insurance and financial products. They are governed by Code of Ethics and oversight boards.
After that, you have to go by feel. Do they...more
Absolutely. You can go one of two primary routes: a child term rider (on your policy) or an individual policy. Which route you choose depends on what you are wanting the insurance for and your budget. If your child is in poor health or there are several children that are needing to be covered (for the least amount of money) a child rider attached to your policy is probably your best bet. For an individual policy, carriers will usually only issue permanent policies on kiddos.
The usual rule-of-thumb is you can get up to 50% of the total coverage issued on Mom and/or Dad. All you need...more
It depends on how long you want the protection. Term insurance is designed to cover a "term of time" like 10, 20, or 30 years. It is very cheap because it almost always lapses or expires without a claim being due. It is pure protection. So, if you have a 5 year old child and are buying insurance to provide monies for college in the event of your death, a 20 year term would probably fit the bill because it would provide protection through your child's education years to age 25. If you are trying to cover your home and you have 29 years left on a mortgage, a 30 year term may be most...more
Beneficiaries are the people or entities that will receive the proceeds of a life policy upon the insureds death. For most people, they will be a spouse or child(ren). There are 3 main types of beneficiary: Primary, Contingent (secondary), and Tertiary. The Primary beneficiary is the person or persons who will be first in line to receive the monies. There can be several primary beneficiaries. A contingent (or secondary) beneficiary is the person or persons who will receive the proceeds of a life policy when no primary beneficiary is alive to collect. A tertiary beneficiary is in line if no...more