Frequently Asked Insurance Questions

How much coverage will I quality for?

Typically, an individual can get up to 20 times his or her annual income in coverage. The total coverage amount a person will qualify for often decreases with age, as retirement draws nearer. For those who are not currently employed, it is still possible to get $50,000 – $100,000 of coverage for items such as final expenses. Unemployed individuals will have to provide information on the application to prove they can afford the premiums, such as disability or retirement income information.

It is possible to get more than 20 times your income for coverage if you have additional assets to protect over and above your income. It is also possible for a homemaker to qualify for the same amount of coverage their spouse has, even without a separate income.a

Group Life vs individual life insurance

Group life insurance is offered by an employer, whereas individual life insurance policies are purchased outside of work. Sometimes group insurance can cost less, depending on a person’s age or pre-existing health conditions. The downside is that group life insurance isn’t always portable. That means that if you leave your employer, or your employer leaves you, you could find yourself without any life insurance coverage. As with investments, it’s a good idea to diversify your insurance plan, as well. In other words, “don’t put all of your eggs in one basket.” It’s important to secure your own individual life insurance policy before something unexpected occurs, such as a change in your employment, or your health. In the clip below

How much will I cost to apply for a policy?

There is no cost to the applicant to apply for a policy. An application is required to get a firm rate quote. The insurance company pays for the physical exam if one is required. There is no obligation to take out a policy. Once you’re approved for coverage, the term and coverage amount can be changed to fit your budget if the rate comes back higher than expected because of health-related issues.

How can I get best result from my physical exams?

Medical Exam Tips – Q and A
Q: What is a paramed exam?
A: A paramed exam is a personal interview to collect information about your medical history. This information allows the insurance company to perform a comprehensive evaluation of your current health. The exam usually includes recording of height, weight, blood pressure, and pulse. The exam may also include the collection of blood and urine.

Q: What happens when the exam is complete?
A: The paramed exam is forwarded to the insurance company. Any specimens obtained during the exam are sent to the laboratory and the results are forwarded to the insurance company for assessment.

Q: How should I prepare for my paramed exam?
A: To obtain accurate information, it is recommended that you:

  • Fast for 8 hours before the appointment
  • Be prepared with a picture ID
  • Limit your intake of salt and high-cholesterol foods 24 hours before the exam
  • Avoid strenuous exercise 12 hours before the exam
  • Refrain from drinking alcoholic beverages for at least 12 hours before the appointment
  • Limit caffeine and nicotine one hour before the appointment
  • Drink a glass of water 1 hour before the appointment
  • Provide names and dosages of current medications
  • Have available names, addresses, and phone numbers of any doctors or clinics you’ve visited in the last 5 years
  • Get a good night’s sleep before the exam

Should I replace my current life insurance policy?

That depends on your needs. A person’s needs change over time. Most term life insurance policies have a premium that increases each year after the initial guaranteed level term period. If you are nearing the end of your initial term period and want to lock in a rate that won’t change for another predetermined number of years, it might benefit you to apply for a new policy and replace, or surrender, the old one.

Best practices when it comes to replacement:

1) Always apply for and secure the new policy before canceling the old one, as some people find they are no longer insurable while applying for a new policy. For instance, changes in your health since the last time you applied for a life insurance policy might make it more challenging to obtain a new policy.

2) If you already have a policy, it’s necessary to indicate how much coverage you have and what company it is with, along with whether you intend to replace your current policy. Individuals can normally get up to 20 times their annual income for a total coverage amount. If you replace your current policy, the new company will not consider that coverage amount as being part of your total coverage amount. If you are keeping your current policy, it will be included in the calculation.

Example: A person who makes $50,000 per year can get up to $1,000,000 of life insurance. If that person already has a $500,000 policy and wishes to keep it, he or she will only qualify for another $500,000 policy, as the two will total $1 million of coverage. If, on the other hand, that person wants to replace the current policy for $500,000, then he or she can apply for $1,000,000 of coverage with the new carrier.

3) Most insurance companies are not concerned about your group life insurance coverage through work, as those plans are usually not portable. This means that most group term coverage cannot go with you if/when you leave that employer. So, when you are asked about your current coverage on the application, they want to know about the policies you’ve taken out on yourself, not about your group coverage of 1 – 10 times your annual salary at work.

Replacements in the state of New York:

If you live in the state of New York, there’s an additional process to go through called Regulation 60 any time you replace a policy or begin a new policy within 6 months of canceling an old policy. This can delay approval of the new policy for up to a month or so, as the new carrier has to notify the old carrier of your intentions to replace the policy you have with the old insurance company. All states have replacement procedures much like this, but the state of New York has an additional paperwork procedure to be sure all parties understand your intentions. This is done as an added consumer protection. It’s basically just an extra “hoop” to jump through with regard to replacing life insurance policies, only in the state of New York.