Answers to common questions

A common approach adds the income your family would need to replace, your mortgage and other debts, future education costs and final expenses, then subtracts existing coverage and savings set aside for your family. Our coverage calculator gives an educational estimate, and an agent can help refine it.

The main types are term life (coverage for a set period) and permanent life, which includes whole life, universal life and indexed universal life. Final expense is typically a smaller whole life policy.

Premiums are generally based on age and health at the time of application, so applying earlier often costs less. The right time is when someone would face financial hardship if you passed away.

Death benefits paid to a beneficiary are generally not subject to federal income tax. Interest on delayed payments, estate taxes and certain ownership arrangements can create tax consequences. Consult a tax professional about your situation.

A term policy will generally lapse after the grace period. A permanent policy may use cash value to cover charges, convert to reduced paid-up coverage or lapse, depending on its terms and values. Contact us before stopping payments so we can review your options.

Indexed universal life is permanent life insurance with a cash value that earns interest based partly on the performance of an external index, subject to caps, participation rates and a floor. It is life insurance, not an investment.

The floor prevents negative index crediting, but policy charges and cost of insurance are deducted every month. In years with low or zero credits, cash value can decrease. Loans, withdrawals and underfunding can also reduce values or cause a lapse.

At the end of each crediting period, the insurer measures the index change (usually excluding dividends), applies the participation rate, and limits the result by the cap and floor. Methods vary by contract. Try the simulator in our IUL Education Center.

Usually, through policy loans or withdrawals. Both reduce the cash value and death benefit, loans accrue interest, and either may have tax consequences or cause the policy to lapse if not managed carefully.

Some people use IUL as a supplemental part of a retirement strategy. Results depend on funding, crediting, charges and loan management, none of which are guaranteed. It is not a replacement for retirement accounts.

Coverage stops. Some policies can be renewed at higher annual rates, and many can be converted to permanent coverage without new medical questions before a deadline in the policy.

Many term policies include a conversion privilege for a limited time. Which permanent products are available depends on the carrier.

It pays a benefit to your beneficiary, who can use it for funeral, burial or cremation costs, medical bills, debts or anything else.

Often, yes. Some plans offer full coverage for qualifying applicants, others offer graded benefits, and some carriers offer guaranteed-acceptance plans for certain ages. Approval is never guaranteed and is decided by the insurer.

No. Mortgage protection offered through our agency is life insurance paid to your named beneficiaries, who decide how to use it.

Many people start with their mortgage balance and loan term, then consider income replacement and other debts.

Yes. A parent or legal guardian can typically apply for a child, either as a rider on a parent’s policy or as a standalone policy. Carriers set age and amount limits.

Usually the parent or guardian, who can often transfer ownership to the child as an adult.

Not always. Many policies use health questions, prescription and medical database checks, and electronic records instead of an exam. Larger amounts or certain ages and health histories may require an exam or lab work.

Yes. With your authorization, insurers may review prescription history, medical records, the MIB (Medical Information Bureau, a database of prior insurance applications), motor vehicle records and other data. Honest, complete answers on the application are essential.

Simplified and accelerated underwriting can take minutes to a few days. Fully underwritten policies that require an exam or records may take several weeks.

Often, yes. Many people with conditions like diabetes, high blood pressure or a history of heart disease qualify for coverage. Each insurer evaluates conditions differently, which is why comparing carriers can help.

It may. Insurers assign rating classes based on health and lifestyle. Some conditions have little effect with one carrier and more with another.

In most cases, yes — the policy owner can change a revocable beneficiary at any time by submitting the carrier’s form. Irrevocable beneficiaries require consent. Our Client Center can help.

You can, but insurers generally cannot pay a minor directly. Many people name a trust or custodian. Consider speaking with an attorney.

Decreases are often allowed. Increases usually require new underwriting or a new policy. Universal life policies may offer more flexibility.

Usually, yes, through the insurance company. Send a request through our Client Center and we’ll help.

A beneficiary notifies the insurer, submits a claim form and a certified death certificate, and the insurer reviews the claim under the policy terms. See our Claims Support page for step-by-step help.

Many straightforward claims are processed after complete paperwork is received. Claims within the first two years of a policy may be reviewed more closely.

No. Consultations and quotes are free. Agents are generally compensated by the insurance company when a policy is issued.

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