23 Frequently asked questions

Why can't I list anyone I want as a beneficiary?
What is a contingent or secondary beneficiary?
Why can't I select any amount of insurance I want if I can afford it?
Why is my prior health histry important if I am healthy now?
Why do the companies you show have prices that vary so much for the same coverage?
Why does it take so long to process an application?
Why does the company need to know my income, assets and liabilities?
If I die, will the company refuse to pay?

1.Why can't I list anyone I want as a beneficiary?

A. In order for someone to qualify as your beneficiary at the time of application they must suffer a financial loss in the event of your death. In other words, they must expect to experience financial hardship as a result of your death. Your spouse, children, a trust or business partners are examples of common beneficiaries.

2. What is a contingent or secondary beneficiary?

A. The contingent or secondary beneficiary is the person or persons designated to receive the death benefit from your life insurance policy in the event that your primary beneficiary should die at the same time, like in a common accident, or before you do.

3. Why can't I select any amount of insurance I want if I can afford it?

A. The purpose of life insurance is to provide protection against loss. As such the amount of coverage that is available to you is the amount of potential financial loss that your beneficiary will experience. The coverage amount is usually determined by a combination of Debt Payment, Income Replacement and Estate Analysis. In all cases, the need for and purpose of the insurance will be considered.

4. Why is my prior health history important if I am healthy now?

A. Personal health history and family health history are both indicators of potential future health issues and premature death. For example, if you have had cancer you may be more likely to have a recurrence even if you are healthy now. Similarly, some types of diseases like heart disease, cancer and diabetes run in families and thus are taken into account for some types of policies if either parent died of one of these diseases prior to age 60.

5. Why do the companies you show have prices that vary so much for the same coverage?

A. Beyond specific underwriting classifications, there are many reasons for the variety in life insurance policies and rates. Insurance companies design products and their specific rate schedules based upon their own experience, industry experience, underwriting philosophy, marketing considerations and the availability of reinsurance.

6. Why does it take so long to process an application?

A. Sometimes it can take a considerable amount of time to process an application for life insurance. Most of that time is spent gathering information to determine your rate. If an applicant has a long medical history and has consulted with several physicians it can take a long time to retrieve those medical records from the various doctors’ offices. Occasionally it will take a long period of time to retrieve just one doctor’s records, particularly if the doctor’s office is not automated or if the doctor is part of an HMO, a large practice or a teaching hospital staff with a bureaucratic record retrieval process.

7. Why does the company need to know my income, assets and liabilities?

A. The insurance company needs to have information about your financial situation so that the amount of insurance made available to you is appropriate for the potential financial loss your beneficiaries might incur as a result of your death.

8. If I die, will the company refuse to pay?

A. An insurance policy is a legally binding contract. The insurance company is required by law to pay the proceeds of the policy in accordance with the policy provisions. Most policies have a two year contestability period during which time they can deny payment for fraud or material misrepresentation of facts (example: you represent that you do not have heart disease yet you previously had a serious heart attack and you die of heart failure within two years of policy issuance). Suicide during the first two policy years is also excluded in most policies. In either of these situations your beneficiary would receive a return of premiums paid rather than the death benefit.

9. Who will see my personal information?
10. What happens if I decide I want more or less coverage two years from now?
11. What happens if I lose weight or quit smoking after my policy is issued? Can I just let them know for a lower or non smoker rate?
12. What is the process?
13. Why does the carrier care about my other policies?
14. Will you be contacting my employer?
15. If I am replacing coverage does the new company cancel my existing coverage?
16. Why are the rates lower now than for my policy I purchased 10 years ago even though I am older?

9. Who will see my personal information?

A. The information contained in medical and financial records will be held in confidence and will be used only for the purpose of determining if you qualify for the insurance coverage you are seeking. Your information may be reviewed and assessed by a qualified staff consisting of medical directors, underwriters, underwriting assistants or other related employees involved in the submission, receipt or evaluation of insurance applications.

10. What happens if I decide I want more or less coverage two years from now?

A. If you want to lower your life insurance coverage please let us know and we can assist you in completing a policy change form and submitting it to your life insurance company. If you want to increase your coverage, please call us so we can make sure you obtain the most competitive rates. Increasing death benefit almost always requires going through the underwriting process again.

11. What happens if I lose weight or quit smoking after my policy is issued? Can I just let them know for a lower or non smoker rate?

A. Every company has different time requirements relative to smoking and weight loss. When you lose weight, quit smoking, or have any other positive change in your health, please let us know so we can help you obtain the best rate.

12. What is the process?

A. You chose the plan and amount of death benefit and apply on line or call us for assistance at (800)823-4852. We will call you to assist you in filling out the application and to schedule your exam. Once you’ve completed your exam and signed and submitted your application, the insurance company underwriters evaluate your health by reviewing your exam and lab work and looking at the medical records provided by your doctors. They also look at your financial needs for insurance and consider any hazardous avocations you participate in. Once the underwriter determines your "risk” the company makes an offer to insure you at a specific rate. We communicate that rate to you, provide you with alternatives and answer any questions you may have. The policy selected is then issued by the insurance company and we send it to you.

13. Why does the carrier care about my other policies?

A. All life insurance policies being applied for or in force are considered in the underwriting process, particularly the financial underwriting process. The existence of large amounts of insurance may also affect the insurance company’s access to reinsurance.

14. Will you be contacting my employer?

A. No.

15. If I am replacing coverage does the new company cancel my existing coverage?

A. No. If you decide to cancel your existing policy you need to do so yourself, but DO NOT DO SO until after your new policy is issued and in force. If you are eligible for a "tax free exchange” of your policy, we will handle all required paperwork.

16. Why are the rates lower now than for my policy I purchased 10 years ago even though I am older?

A. Life insurance is a very competitive business and competition and improved life expectancies have driven rates down.

17. I quit smoking 3 months ago, why am I still considered a smoker?
18. Will I get any money back at the end of my term?
19. What happens to my 10 year term policy after 10 years?
20. Why do I need to apply, I already know how much I want, can I just purchase it now?
21. Do I get a discount if I pay annually?
22. Do you take credit cards?
23. Do I get a discount if both my spouse and I apply?

17. I quit smoking 3 months ago, why am I still considered a smoker?

A. Life insurance companies require that you be a non smoker for a period of time, usually a minimum of one full year, sometimes three to five years, in order to qualify for the best non smoker rates. This is simply due to the fact that many smokers quit for short periods of time and then return to smoking. At least one of our companies sometimes considers occasional smokers or smokers who recently quit smoking for their non-smoking rate classification. Be sure to tell us about your smoking habits if you fall into this category so we can obtain the most competitive rate for you.

18. Will I get any money back at the end of my term?

A. Normally no, unless you chose a policy with a Return of Premium option. If you chose a Return of Premium term policy you typically pay a little more for your policy but receive all the money you’ve paid into the policy back at the end of the policy term if you are still living at that time.

19. What happens to my 10 year term policy after 10 years?

A. At the end of the guaranteed policy term, most insurance companies will offer to renew the policy, but usually at a premium that is substantially higher than you currently are paying.

20. Why do I need to apply, I already know how much I want, can I just purchase it now?

A. Yes. However, purchasing the policy now involves applying. If you are in good health you may "bind” coverage, that is to say, you may purchase temporary coverage during the issuance process up to the amount allowed by the insurance company by answering some questions and submitting your first premium (minimum two months) with the application.

21. Do I get a discount if I pay annually?

A. Technically no, but paying annually is less expensive than paying monthly, quarterly or semi-annually. We discourage quarterly premiums because they are by far the most expensive to you. Semi-annual and monthly automatic payment from a checking or savings account are in between annual and quarterly premiums and are the best choice if you do not want to pay annually.

22. Do you take credit cards?

A. Most carriers do not accept credit cards, however, some do. Usually the carriers require a check drawn on a bank account to pay the first premium. Thereafter you may opt for automatic withdrawal.

23. Do I get a discount if both my spouse and I apply?

A. Not normally. Some policies do offer riders to provide coverage for spouses and children but it is usually more cost effective to obtain separate coverage for a spouse. Let us know if you also want coverage for your spouse so we can examine every option and provide the most cost effective life insurance for you both.