Am I Covered?: Life Insurance Questions

Here is a 'starter' list of things to consider and questions to ask your agent. Since these are 'starter' questions - you'll probably come up with questions or ideas that best fit your needs.

Things to Consider

  1. How much insurance do I need?

    WHN TIP: Your Current Financial Resources

    Compare your current financial resources against the debts and liabilities covered in #2, #3, #4.

  2. Approximately what would be my funeral and burial costs?

    WHN TIP:

    Read our article “Average Funeral Costs”.

    • Will my life insurance policy cover these costs?
    • If not, do you have a separate burial policy?
  3. What outstanding debts would need to be settled by my estate? (Include credit cards, loans, mortgages and taxes.) What about business debts?
  4. Do I have any dependents that rely on my income?

    WHN TIP: Assessing Dependents' Needs

    Calculate their income needs: food, clothing, home, property taxes and other costs you pay (in full or in part) along with an emergency fund amount and projected or actual cost of your child’s college tuition.

  5. Which type of life insurance would be best for me: term life (no investment component and is only for short-term coverage) or cash-value (permanent policies that also build up cash like a savings account)? What are the choices within each category?

    WHN TIP: Employer Group Life Insurance

    Your employer might also offer a group life insurance policy. Ask your employer about your benefits and coverage options.

  6. Do I need a credit life insurance policy?
    • Credit life insurance is usually more expensive than a regular life insurance policy.

      WHN TIP: Credit Life Insurance

      A credit life insurance policy is used to pay off debts after the policyholder’s death. You might be offered this policy option when purchasing an expensive item.

Questions to Ask the Agent

Here is a list of some questions you may want to ask your insurance agent. These questions may confirm what you already know, or may help you understand what you are covered for.

Remember to write down the name of the person you talk with as well as the day, date, phone and email information. With each question and answer be sure to include an outcome, who is responsible for the task and a follow-up meeting date to ensure progress.

If there is something about your policy that doesn’t you don’t understand, ask about it. You can also ask for a verbal clause in writing, which can help explain that part of the policy.

  1. What is included in the policy?
  2. What are the “exclusions” and “limitations” of the policy?
  3. How much are premiums?
  4. What factors increase a policy cost or raise my premiums? What can decrease the cost of the policy or premiums?
  5. Have your agent show you and explain where you fall within national averages – am you paying average, more, or less, and what factors into the answers?
  6. Do you need to complete a medical exam in order to be eligible for the policy?
  7. Can you name any beneficiary you choose? If he/she is a minor, do you need to appoint a trustee or name a guardian?
  8. How do you make a change in beneficiary?
  9. How soon does policy go into effect?
  10. How often should you review the policy?
  11. Is the policy convertible and for how long?
    • “Convertible” means you can exchange your renewable term policy for another type of policy without evidence of insurability.
  12. When does the policy expire?
  13. Is the policy renewable?
  14. What are payment options for premiums (annual payments, bi-annual, monthly, etc.)?
  15. What happens if you can’t pay a premium for a month?
  16. What happens if the policy lapses?
  17. Can you cancel the policy at any time? Is there a penalty?
  18. Under what circumstances can the insurance company cancel the policy?
  19. Are the life insurance benefits or proceeds taxable?
  20. How do you file a life insurance claim? How long does the company have to respond to the claim?
  21. Should you buy an insurance policy for your spouse or children?