Who needs life insurance?
Generally, anyone who has dependents or financial obligations that could become burdensome to others after their death should consider life insurance.
How do I choose the right amount of coverage?
The right amount of coverage varies by individual. It depends on various factors, including income, debts, lifestyle, future expenses (such as education costs for children), and the financial needs of your dependents. A common guideline is to obtain a policy worth 10 to 12 times your yearly income.
Can I change my life insurance policy?
Yes, in many cases, you can change your life insurance policy. Term life insurance often offers the option to convert to a permanent policy. With universal life policies, you can adjust your death benefit or premiums.
What happens if I miss a premium payment?
Most policies have a grace period, typically 30 days, during which you can pay late without losing coverage. If you miss payments beyond the grace period, your policy may lapse, and you could lose coverage. However, many permanent life insurance policies allow accumulated cash value to cover missed premiums, preventing the policy from lapsing.
Is the life insurance payout taxable?
In most cases, life insurance death benefits to beneficiaries are not subject to income tax.
How do I choose a beneficiary?
A beneficiary can be a person, multiple people, a trust, a charity, or your estate. You can also designate contingent beneficiaries to receive the benefit in case the primary beneficiary cannot.
Can I get life insurance with a pre-existing condition?
Yes, but it might be more expensive. Be honest and transparent about your condition to avoid committing insurance fraud.
What does life insurance exclude?
Many policies exclude coverage if the insured commits suicide within two years of policy commencement. Also, deaths from the insured's involvement in illegal activities or committing a crime might be excluded.
Can I have multiple life insurance policies?
Yes, you can have multiple life policies from different insurers or different policies with the same insurer.
