Life insurance is one of the most important financial decisions you can make, yet it’s often surrounded by confusion and uncertainty. To help you make informed choices, we’ve compiled the top 10 questions people ask about life insurance, along with clear and concise answers.

Whether you’re just starting to explore your options or looking to update your existing policy, this guide has you covered.

1. What Is Life Insurance and Why Do I Need It?

Life insurance is a financial safety net for your loved ones. It provides a lump-sum payment, known as the death benefit, to your beneficiaries if you pass away.

💡 Why You Need It:

• To replace lost income
• To cover funeral and burial costs
• To pay off debts, like mortgages or loans
• To secure your family’s financial future

2. How Much Life Insurance Coverage Do I Need?

The amount of coverage you need depends on your financial situation, goals, and family’s needs. A general rule of thumb is to have coverage equal to 10–15 times your annual income.

💡 Consider These Factors:

• Immediate expenses (funeral costs, medical bills)
• Long-term needs (income replacement, children’s education)
• Existing assets and savings

3. What’s the Difference Between Term and Whole Life Insurance?

• Term Life Insurance: Provides coverage for a specific period (10, 20, or 30 years). It’s affordable and straightforward but has no cash value.
• Whole Life Insurance: Offers lifelong coverage and includes a cash value component that grows over time. Premiums are higher but remain fixed.

💡 Tip: Term is ideal for temporary needs; whole life is better for long-term protection and savings growth.

4. How Much Does Life Insurance Cost?

The cost of life insurance depends on:

• Your age and health
• The type of policy (term vs. whole life)
• The amount of coverage you choose

💡 Example: A healthy 30-year-old can expect to pay $20–$30 per month for a 20-year term policy with $500,000 in coverage.

5. Can I Get Life Insurance If I Have Pre-Existing Conditions?

Yes, many insurers offer coverage for people with pre-existing conditions, though premiums may be higher. Some policies, like guaranteed issue life insurance, don’t require a medical exam but may have lower coverage limits.

💡 Tip: Be honest about your health history when applying. Misrepresentation could result in denied claims.

6. What Happens If I Miss a Payment?

Most policies include a grace period (typically 30 days) to make up missed payments. If you don’t pay within the grace period, your policy may lapse.

💡 Tip: Set up automatic payments to avoid missed premiums.

7. Are Life Insurance Benefits Tax-Free?

In most cases, life insurance payouts are not subject to federal income tax. However, there may be exceptions if the policy was transferred or if estate taxes apply.

💡 Tip: Consult a financial advisor to understand your specific situation.

8. Can I Have More Than One Life Insurance Policy?

Yes, you can have multiple policies to meet different needs. For example, you might have a term policy for income replacement and a whole life policy for legacy planning.

💡 Tip: Keep track of all your policies to ensure adequate coverage without overpaying.

9. What Is a Beneficiary, and Who Can I Name?

A beneficiary is the person or entity that receives the death benefit. You can name:

• A spouse, child, or other family member
• A friend or business partner
• A trust or charity

💡 Tip: Review and update your beneficiaries regularly, especially after major life events like marriage, divorce, or the birth of a child.

10. When Should I Reevaluate My Life Insurance Policy?

Reevaluate your policy after major life changes, such as:

• Getting married or divorced
• Having children
• Buying a home
• Changing jobs or income levels

💡 Tip: Set a reminder to review your policy every 2–3 years, even if no major changes have occurred.

Next Steps: Take Action Today

Understanding life insurance is the first step toward securing your family’s financial future. Now that you have answers to the most common questions, it’s time to take action:

1. Assess your needs and goals.
2. Speak with a trusted advisor.
3. Choose the policy that fits your budget and lifestyle.

➡️ Still have questions? Contact us today for a personalized consultation.