Life Insurance

7 Questions to Ask Before Buying Life Insurance

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If you've reached a milestone in your life — getting married, having your first child, buying a house — you may be considering purchasing a life insurance policy. There's a lot to learn before you find the policy that's right for you, and you may be wondering what questions to ask when buying life insurance.

Because the insurance industry is complex, insurance questions are quite common. There are multiple factors to consider when comparing policies. Let's dive into possible questions to ask about life insurance, along with practical answers and advice.

1. Do I need life insurance?

The most basic insurance questions often start with: do you need a policy? More often than not, the answer is "yes." Whether you're looking for a way to help make sure your family will be protected if you aren't there or you wish to make a legacy gift to a favorite charity, there are many reasons why you may want someone to benefit from your foresight. 

Even if you're young with no children, you may have reasons for wanting to provide benefits to a person or organization that will long outlive you. And the earlier in life you purchase your policy, the lower the cost of the monthly premiums you can lock in.

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2. What kind of life insurance do I need?

This is one of the most common life insurance questions. To find a policy that suits you best, you'll need to know the types of policies available to you. There are two primary categories of life insurance:

  • Term life insurance is easy and inexpensive. It provides a payout for a specific term of years, such as 10, 20, or 30 years. Once the term ends, so does the policy. It's a cost-effective way to protect your family while your children are young.
  • Permanent life insurance, such as whole life insurance, lasts throughout your life. It's usually more expensive than term but offers an added benefit: you can receive back a portion of your premiums as a loan or use it to pay for future premiums through a savings component called the cash value. Ethos' whole life policy for seniors may help pay for end-of-life costs. It features a stabilized rate that never increases.

3. How much life insurance do I need?

When choosing life insurance, you should consider the payout, also called the death benefit. This is the amount of money your beneficiary, whom you name when you purchase the policy, will receive when you pass away. It can be a single person, multiple people, or an organization. 

To calculate how much life insurance you need, add up any debts you have, including loans and your mortgage. Add the amount it would take to allow your beneficiary to maintain the same lifestyle they currently have, including educational costs if you have minor children. And consider what your funeral costs would be — the average is nearly $8,000

The total gives you a reasonable estimate for the amount of life insurance you should purchase. You can get a personalized estimate by using the Ethos coverage calculator to help you determine the best option for your needs.

4. How do I get the best deal on my life insurance premiums?

If you're like most people, you don't want to spend more money than you need to, so this may be one of the best questions to ask life insurance agents. At Ethos, you can save money in several ways. 

First, consider term policies. They are generally the most inexpensive policies available. If you're an older individual aged 66 to 85, look into whole life for seniors policies offered by Ethos. These are typically available for a payout of up to $30,000. But just as importantly, they'll slowly build a cash value for you that you can use to further your financial goals, saving you money while offering financial protection for your heirs. 

5. Can I get life insurance if my health isn't the best?

This is a typical life insurance question. Life insurance companies determine your premium based partly on your health. Many companies require an extensive medical exam to get a baseline on your medical history. However, with Ethos, most people can purchase a policy by answering a few health questions as part of the online application. Once you have a policy, your premiums will remain unchanged throughout the policy's life, even if your health takes a turn for the worse.  

6. What if I want to increase my coverage in the future?

When you purchase your policy, you settle on the amount your beneficiary would receive if you were to pass away during the policy's life. In some cases, if you're providing for minor children, your need for life insurance may decrease as your children become adults and no longer need your financial support. In that case, it may be possible to convert your term insurance to a whole life policy and change the benefit amount. Note that Ethos does not offer convertible policies, but whole life policies are available to customers between 66 and 85.

7. How easy is it to get a life insurance policy?

When choosing life insurance, you should consider how difficult it is to get a policy. It doesn't have to be complicated. At Ethos, it only takes about 10-15 minutes to get an estimate and complete the online application, which includes a series of health questions. There is no need to wait for a medical exam for most applicants, and many of our customers who apply for life insurance online enjoy same-day coverage. If you have questions, there are non-commissioned agents available to answer them — but you don't have to work directly with an agent unless you want to.

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