When I help families navigate life insurance decisions, one of the most common things I hear is: “I’m so confused by all the options and terminology.” You’re not alone. Life insurance can seem overwhelming at first, but I’ve found that most questions on life insurance fall into a few key categories that, once understood, make everything much clearer.
For a complete overview, see how final expense insurance works.
After working with hundreds of families over the years, I’ve compiled the most important questions people ask when shopping for life insurance. Let me walk you through these questions and give you the straightforward answers you need to make an informed decision.
What Type of Life Insurance Do I Need?
This is usually the first question people ask me, and it’s a great place to start. There are two main categories of life insurance, each serving different purposes:
Term Life Insurance provides coverage for a specific period (10, 20, or 30 years). It’s pure protection—if you pass away during the term, your beneficiaries receive the death benefit. If you outlive the term, the policy ends. Term insurance is typically the most affordable option and works well for temporary needs like:
- Protecting a mortgage
- Covering children until they’re financially independent
- Replacing income during your working years
Permanent Life Insurance includes whole life, universal life, and indexed universal life. These policies combine a death benefit with a cash value component that grows over time. While premiums are higher than term, permanent insurance offers lifelong protection and can serve as a financial asset.
When I sit down with clients, I help them determine which type fits their specific situation. A young family might benefit from term insurance to protect their mortgage and provide income replacement, while someone focused on estate planning or retirement supplementation might consider permanent coverage.
How Much Life Insurance Coverage Do I Need?
This question requires looking at your financial obligations and goals. I typically walk clients through what I call the “replacement calculation”:
Income Replacement: A common rule of thumb is 10-12 times your annual income, but this isn’t always accurate. Consider how much income your family would need to maintain their lifestyle, then factor in other income sources like Social Security survivor benefits or a spouse’s earnings.
Debt Coverage: Add up major debts like your mortgage, car loans, and credit cards. Your life insurance should be sufficient to eliminate these burdens for your family.
Future Expenses: Consider upcoming costs like children’s college education, which can easily run $100,000-$300,000 per child for a four-year degree.
Final Expenses: Even a basic funeral can cost $10,000-$15,000, and many families prefer more elaborate arrangements.
In my experience, most families need more coverage than they initially think. It’s better to have too much protection than to leave your loved ones financially struggling.
What Health Conditions Affect Life Insurance Approval?
Many people worry that health issues will prevent them from getting coverage, but I want to reassure you—most conditions are insurable. Insurance companies are in the business of providing coverage, and they’ve developed sophisticated ways to assess risk.
Common Conditions That Are Often Insurable:
- High blood pressure (when controlled)
- High cholesterol
- Type 2 diabetes (well-managed)
- Depression or anxiety (stable treatment)
- Previous cancer (depending on type and time since treatment)
- Sleep apnea (with CPAP compliance)
The key factors insurance companies consider are:
- How well the condition is controlled
- How long you’ve been stable
- Your overall health picture
- Your age when diagnosed
Conditions That May Require Special Consideration:
- Recent heart attack or stroke
- Active cancer treatment
- Insulin-dependent diabetes
- Severe mental health conditions
- Liver or kidney disease
Even with more serious conditions, coverage is often available—it might just be at higher premiums or with certain restrictions. As an independent agent, I work with multiple carriers because each company has different underwriting guidelines. What one company might decline, another might approve at standard rates.
How Does the Life Insurance Application Process Work?
I explain to my clients that the application process has several steps, and understanding them upfront helps avoid surprises:
Step 1: Application Review After you complete the application, the insurance company reviews your answers for any immediate concerns. They’ll also run a prescription drug history check and motor vehicle report.
Step 2: Medical Exam (if required) For larger amounts or certain ages, you’ll need a medical exam. This typically happens at your home or workplace and includes:
- Height and weight measurements
- Blood pressure and pulse check
- Blood and urine samples
- Basic health questions
Step 3: Medical Records Review If you’ve had significant health issues, the insurance company may request records from your doctors. This is called an Attending Physician Statement (APS).
Step 4: Underwriting Decision The underwriter reviews all information and makes a decision. They might approve you as applied, offer different terms, or request additional information.
The entire process typically takes 2-6 weeks, depending on the complexity of your health history and the amount of coverage requested.
What If I’m Declined for Traditional Life Insurance?
Getting declined doesn’t mean you’re out of options. There are several alternatives I can help you explore:
Simplified Issue Life Insurance requires answering basic health questions but doesn’t require a medical exam or blood work. The questions are designed to screen out major health issues, but many conditions that might cause problems in traditional underwriting are acceptable.
Guaranteed Issue Life Insurance requires no health questions at all. Everyone who applies within the age limits (typically 50-85) is approved. The trade-offs are lower coverage amounts (usually $5,000-$25,000) and a graded death benefit, meaning full benefits aren’t available for the first 2-3 years.
Group Life Insurance through your employer might be an option if individual coverage isn’t available. While you can’t take it with you if you change jobs, it provides some protection while you have it.
How Do Premiums Work and What Affects the Cost?
Understanding how life insurance is priced helps you make better decisions and potentially save money:
Age is the biggest factor—premiums increase as you get older because the statistical likelihood of death increases.
Health significantly impacts pricing. Insurance companies group applicants into rate classes:
- Preferred Plus (best health, lowest rates)
- Preferred
- Standard Plus
- Standard
- Table ratings (for higher risk applicants)
Lifestyle factors like smoking, drinking habits, and dangerous hobbies affect pricing. Smokers typically pay 2-3 times more than non-smokers for the same coverage.
Coverage amount affects the rate per $1,000 of coverage—larger policies often have better per-unit pricing.
Policy type matters significantly. Term insurance is cheapest initially, but permanent insurance provides lifetime coverage and additional benefits.
When Should I Buy Life Insurance?
The best time to buy life insurance is when you’re young and healthy. Premiums are lowest when you’re younger, and you lock in your health status at the time of application.
Life Events That Should Trigger a Review:
- Getting married
- Having children
- Buying a home
- Starting a business
- Significant salary increase
- Divorce
- Children becoming financially independent
I often tell clients that life insurance is one of the few financial products where procrastination can be expensive or even impossible to fix later. Health changes and aging make coverage more expensive or potentially unavailable.
Can I Change My Life Insurance Policy Later?
Many people don’t realize that life insurance policies can be modified after purchase:
Term Insurance Changes:
- Convert to permanent insurance (if the policy includes conversion rights)
- Reduce coverage amount
- Add riders for additional benefits
Permanent Insurance Changes:
- Adjust premium payments (within limits)
- Add or remove riders
- Take loans against cash value
- Modify death benefit amounts
Always work with your agent before making changes, as some modifications might require new underwriting or could have tax implications.
What Riders Should I Consider?
Riders are add-ons that provide additional benefits. The most common ones I recommend include:
Waiver of Premium Rider continues your coverage if you become disabled and can’t work. For a small additional cost, this provides valuable protection.
Accidental Death Benefit Rider pays an additional benefit if you die in an accident. While relatively inexpensive, remember that most deaths aren’t accidental.
Term Conversion Rider allows you to convert term insurance to permanent coverage without new health questions—valuable if your health declines.
Child Rider provides small amounts of coverage on children and typically includes the right to purchase larger amounts when they become adults.
Long-Term Care Rider allows you to use part of your death benefit for long-term care expenses if needed.
How Do I Choose an Insurance Company?
Financial strength should be your primary concern when selecting a life insurance company. I always recommend looking at ratings from independent agencies:
- A.M. Best: A+ or A ratings indicate superior financial strength
- Standard & Poor’s: AA or higher ratings show strong financial capacity
- Moody’s: Aa ratings or higher indicate high-quality financial strength
Other factors to consider:
- Company history and reputation
- Customer service quality
- Claims-paying history
- Product options and flexibility
As an independent agent, I work with multiple highly-rated carriers, which allows me to match you with the company that offers the best combination of rates, underwriting, and service for your specific situation.
What Happens During the Contestability Period?
Every life insurance policy has a contestability period—typically the first two years after purchase. During this time, the insurance company can investigate claims and potentially deny benefits if they discover material misrepresentations on the application.
This is why complete honesty on your application is crucial. The insurance company will likely discover any health conditions or lifestyle factors through medical records, prescription databases, or other sources. It’s always better to disclose something upfront than risk having a claim denied later.
After the contestability period ends, the company generally cannot contest the policy except in cases of outright fraud.
Making Your Decision
The most important thing I can tell you about life insurance is this: the perfect policy is the one you actually purchase and keep in force. Too many people spend so much time trying to optimize every detail that they never actually get coverage.
Start with the basics—determine how much coverage you need and what type makes sense for your situation. You can always adjust or add coverage later as your circumstances change.
Finding the right life insurance doesn’t have to be complicated. As an independent agent, I work with multiple top-rated carriers and can help you compare options to find the best coverage at the best price.
Related Reading
- Funeral Insurance for Seniors: Your Complete Guide
- Affordable Final Expense Insurance: Your Complete Guide
- Burial Insurance for Seniors Over 70: Your Complete Guide
- Graded Benefit Whole Life Insurance: Your Complete Guide
Let me do the shopping for you. I’ll compare quotes from multiple companies and help you find coverage that fits your needs and budget. Most importantly, I’ll guide you through the application process and be there to help your family if they ever need to file a claim.
Get Your Free Quote Comparison
- Choose term life insurance for temporary needs like mortgage protection and income replacement, or permanent life insurance for lifelong coverage with cash value growth
- Calculate your coverage needs by adding income replacement, debt payoff, future expenses like college costs, and final expenses rather than relying on simple income multipliers
- Expect to need more life insurance than you initially think, as most families underestimate their true financial protection requirements
- Don’t assume health conditions will prevent you from getting coverage, as most medical issues are insurable with proper underwriting
- Start with the two main types of life insurance and work through your specific financial situation to determine which option fits your family’s needs
