Frequently Asked Questions 

Life insurance is a contract between you and an insurance company. The insurer promises to pay a sum of money to a designated beneficiary after you die, and in exchange, you pay ongoing payments called premiums.

The two main types of life insurance are permanent and term. Costs and features vary.

Everyone may not need life insurance. If you are young, single and have minimal debt, a policy may not be necessary. However, if you have a family or major financial obligations — such as a mortgage — purchasing a policy can be a smart way to protect the people you care about after you die. 

The right amount of coverage depends on several factors, including your financial status, family situation, health and age. Some experts recommend purchasing life insurance coverage worth 10 to 25 times your annual income.

Others recommend a more personalized approach that considers your current income as well as any outstanding debts, remaining mortgage payments and education costs for your children.

Yes, you can have multiple life insurance policies from different insurers or with the same insurer. It's common to have coverage from different sources to meet specific needs. 

Everyone’s situation is different. For many people, term life insurance is a good fit because it’s affordable and provides coverage during your primary income-earning years. However, permanent life insurance is ideal for people seeking lifelong coverage, tax advantages and investment opportunities.  

A term life insurance policy offers a guaranteed death benefit that lasts for a specific amount of time, such as 10, 20 or 30 years. If you pass away during this time, the insurance company pays money to your beneficiary. It’s the most affordable type of life insurance. 

A permanent life insurance policy offers coverage that never expires so long as premiums are paid. It also features a growing cash value you can use and borrow against over time.

There are several different types of permanent life insurance, including whole, variable and universal.

The cost of life insurance depends on many factors, including the type of policy and coverage amount as well as your age, health and sex.

Policy rates are much more affordable when you’re young. Rates for men tend to be more expensive than women due to life expectancy. Smokers always pay more for coverage than non-smokers.

Purchasing a life insurance policy when you’re young is an easy way to obtain more affordable coverage. Another option is purchasing term life coverage now and converting it to a permanent life policy later when you’re older and earning more money.

If you miss a payment, your policy may lapse or enter a grace period. Some policies have provisions for reinstatement, but it's essential to contact your insurer to discuss your options. 

The best time to purchase life insurance is when other people depend on you financially, such as a spouse or minor children. For most people, this is in their 30s or 40s. Life insurance is also more affordable when you’re young. 

A beneficiary is the designated person on your policy who receives money from the insurance company after you pass away.

Yes! While you can leave your entire death benefit to a single beneficiary, you may also select several beneficiaries. You may also select the proportion of the death benefit each beneficiary should receive. 

A death benefit is the money your beneficiary receives from the life insurance company after you die. You select this amount when you purchase the policy. 

Life insurance proceeds are not taxed, and beneficiaries don’t need to report the payout as income. 

Beneficiaries typically receive the death benefit as a tax-free lump sum payment. They can choose how to use the funds according to your wishes or their financial needs. 

After you pass away, your beneficiary will need to make a claim with the insurance company.

To do so, they will need:

• Your death certificate

• The life insurance policy

• A completed claim form from the insurer

If you have named multiple beneficiaries, each person will need to submit their own separate claim to the insurance company.

An accelerated death benefit is a type of rider added to your life insurance policy, usually at a cost.

It lets you access some or all of your policy’s death benefit under certain circumstances when you’re still alive. This can include being diagnosed with a terminal illness or suffering a critical illness.