5 Questions About Life Insurance You May Hesitate to Ask

Whether you're shopping for a new policy or reviewing an existing one, read on for answers to your life insurance questions.

1. Why do I need a life insurance policy if I already have one through work?

One of the most common life insurance questions is whether you need to purchase a separate policy if you already have one available through work. Typically, a workplace life insurance policy provides a group policy at a very low-cost or completely free, making people question if more is needed. The answer depends on how much life insurance you need for your dependents. 

Your employer may offer a policy where the death benefit is several times your salary, which may be enough for some people, but not others. The payout may be less if your spouse also has coverage through your workplace. If you have several dependents, a mortgage, educational costs, or special-needs children, then you may need to supplement your workplace policy with another policy providing additional death benefits.

It's also critically important to realize that if you purchase your policy and lose your job, your life insurance policy doesn't go with you. By getting life insurance on your own, you'll have the benefits of a policy no matter where life takes you.

2. How much life insurance do I need?

Wondering how much life insurance you need to purchase is another one of the most common life insurance questions. The most significant component of an insurance policy is the death benefit, which is the amount your beneficiaries receive from the policy when you pass away. 

To calculate the amount needed, first add up the debts you owe, including a mortgage and other loans. You should also know how much money the beneficiaries need to maintain their lifestyle. If you have minor children, then also consider educational costs. Lastly, add in funeral costs, which, on average, can cost around $8,000. 

Adding these together gives you a general idea of how much you need. You can also use Ethos' convenient life insurance estimator.  

3. How much does life insurance cost?

The cost of life insurance premiums depends on many factors. Basic parameters, such as age, gender, medical history, coverage amount, and type of policy, all impact how much you pay. 

Term policies are typically the least expensive. Ethos offers several term length options, including 10, 15, 20, and 30-year options and payouts ranging from $20,000 to $2,000,000. Each selection varies in cost, so getting a free online quote offers a more accurate picture of exactly how much a life insurance policy will cost. 

4. What medical questions are asked for life insurance?

Life insurance companies rely on medical questions to determine the risk someone presents, which is how premiums are calculated. Due to this, there are a variety of questions asked, including:

• Age
• Gender
• Health history
• Drug use
• Tobacco use

One advantage to Ethos is that most people only have to answer a few medical questions during the online life insurance application process. In addition to medical questions, you'll be asked non-medical questions centered around your occupation, hobbies, foreign travel, and other lifestyle indicators. These are all used by the underwriters to further assess risk. 

5. What if my life insurance application is denied?

Being denied a life insurance policy is disappointing and frustrating, especially when you're unsure why you received a denial. Life insurance applications are rejected for many reasons, but this doesn't mean you can't still find the right policy. You can re-apply if you've made changes to your lifestyle, such as quitting smoking or losing weight, or you can apply with other carriers.

Life insurance applications may be denied for multiple reasons, including:

• Pre-existing conditions: If you're overweight, a smoker, have a family history of heart disease or cancer, or numerous other pre-existing conditions, then a life insurance company can deny your application.
• Age: Some life insurance companies have strict age requirements for underwriting, and if you're over the maximum age, you can be denied.
• Occupation or lifestyle risk: If your job is considered risky, or you participate in dangerous activities, such as skydiving or rock climbing, it can be a reason for a life insurance denial.
• Lying on the application: If you omitted any information or were caught providing false information, it's grounds for denial. 
• Other factors: If you have a criminal record, poor driving history, or a complicated financial situation, you could face an application rejection. 

If you have questions about our life insurance policies, Ethos is here to help. No matter your policy questions, or the application process, you can reach out to us via email or speak to a live agent for guidance.