What Questions To Ask When Buying Life Insurance

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May 17, 2021


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Life insurance is a basic necessity that’s often overlooked not because people don’t want or need it— but because they don’t know enough about it. Educating yourself by asking as many questions as you can when buying life insurance will help you to make an informed decision for yourself and your family. You’ll make sure that, not only is your family protected, but that your financial goals are, too.

General Questions To Ask When Buying Life Insurance

Asking the following questions when you’re buying life insurance will ensure that you’re well-informed on your plan, your potential eligibility for insurance, and what factors might impact your eligibility and/or premium rates now and in the future. It will also help you understand how much you’ll need to budget for your coverage.

Questions To Ask

  1. How do I know how much insurance I need?
  2. What factors that can impact my rates?
  3. How are premiums determined?
  4. Am I eligible for life insurance?
  5. When should I purchase life insurance?
  6. What are the different types of life insurance options available to me?
  7. What is the definition of a “smoker”?

Life Insurance Questions To Ask Your Employer or HR Representative

Life insurance coverage offered through group insurance plans varies a lot. It can range from a flat amount that everyone receives, to a multiple of your individual annual earnings. If you have a group benefit plan, it’s important to understand that plan and how much life insurance you have in place through your employer.

It’s also important to share any information you have about your group life insurance coverage with your insurance advisor. That way, we can make note of it when determining how much insurance you need (and make sure you never have too much or too little coverage).

Note: We never recommend relying solely on your employer coverage as your only life insurance protection because you do not own the policy. (Technically, you’re ‘renting’ it from your employer while you’re employed there.) That means changes to the benefit plan can be made at any time, and that you’ll have no control over them. And, if you leave that job, you could end up with a gap in your coverage!

Questions To Ask

  1. How much coverage do I have?
  2. How does my life insurance work?
  3. What is the benefit amount or structure?

Questions To Ask Your Life Insurance Advisor

When you’re learning the ins and outs of life insurance, your insurance advisor is the perfect person to speak with. They’ll put you and your needs first, and do everything they can to support you as you purchase your insurance and in the event that you need to make a claim. Your advisor can answer just about any questions you have about your plan, your premiums, and your eligibility!

What To Disclose

It’s important to disclose the following information to your insurance advisor so they can accurately determine any possible outcomes and solutions that can impact your rates or eligibility.

  • Health concerns
  • A criminal record
  • Any high-risk activities your partake in
  • Your occupation, if it’s high-risk
  • Any hard drug usage in the last 10 years
  • Daily marijuana usage

Questions To Ask

  1. When should I buy life insurance?
  2. What type of life insurance should I buy?
  3. What’s the difference between a life insurance policy and mortgage insurance?

…and any other questions you have about your eligibility, your policy, and your premiums.

Questions To Ask About Your Life Insurance Policy

Take the time to make sure you understand what, specifically, your life insurance policy covers. Know that you’re never inconveniencing anyone or overstepping. You have every right to know all the details about your life insurance. Your Insurance Advisor will be more than happy to discuss all of the following with you:

  1. What kind should I get? Term life insurance or permanent?
  2. If I get term coverage, what happens at the end of my term? Can I cancel or convert it?
  3. What does ‘conversion’ mean?
  4. What does my policy include coverage for?
  5. How much coverage do I have?
  6. How long is the coverage in place for?
  7. Who is my beneficiary?
  8. What does my beneficiary need to do to make a claim?
  9. What if I have a change in my health? What happens to my policy and premiums?
  10. Why are my renewal premiums so high?

Questions To Ask About Your Death Benefit

A death benefit for your loved ones is a big reason why many people secure life insurance. Ask the following questions about the death benefit in particular:

  1. Is my death benefit a level benefit amount?
  2. How much should my beneficiary expect to receive?
  3. Who does the policy pay a benefit to?
  4. Is the benefit amount tax-free?
  5. Can I make my beneficiary more than one person?
  6. What if I want to leave the money to my children but they are under the age of 18?
  7. Are there any exclusions to my coverage that would result in a claim not being paid?

Questions To Ask About Your Health When Buying Life Insurance

It’s important to disclose any health concerns you have to your insurance advisor. Health conditions can be seen as a risk to the insurer, which means they can impact your life insurance rates and eligibility.

If you have a pre-existing health condition, depending on the severity, you can still get a standard life insurance contract. But sometimes the insurer will add an additional amount to the premium, which means you’ll pay more for the coverage.

Questions To Ask

  1. What type of coverage am I eligible for?
  2. How much coverage am I eligible for?
  3. If my health changes, what happens to my policy and premiums?

Related: Life Insurance for Canadians with Pre-Existing Medical Conditions

Questions To Ask About Life Insurance Appeals and Claims

The first two years of every life insurance contract fall under what’s called the “incontestability period.” That means that, should a claim arise during this time period, the insurer can contest it. If this happens, they’ll do their due diligence, making sure that no omissions were made or misinformation was provided when you purchased your insurance. As long as you are honest and truthful on your application, there should be a smooth process for your family’s claim.

Questions To Ask

  1. Who does my beneficiary contact to make a claim?
  2. What is needed to submit a claim?
  3. What is the typical turnaround for claims payment?

Get The Answers To Your Life Insurance Questions!

When you’re ready to learn more about what life insurance would look like for you, simply reach out to us. Our Insurance Advisor will get in touch and set up a time to answer all of your questions.