5 Questions to Ask Before Purchasing Life Insurance

  • How Much Is the Premium?
  • Is There a Waiting Period for Coverage?
  • Is an Annual Physical Exam Required?
  • Could the Plan Be Canceled for Any Reason?
  • When Does the Policy End?

There comes a time when many adults wonder about the five questions to ask before purchasing life insurance. Most people do not want to think about their own demise, but being prepared is important. These are some key questions to ask an insurance agent before signing the paperwork and handing over the fee for the premium.

How Much Is the Premium?

Most people have to deal with a monthly or annual budget for their finances. It is important to ask how much the monthly or annual premium is for the policy. The premium usually depends on the level of coverage, length of the policy and the individual’s health status.

Is There a Waiting Period for Coverage?

A person might be tempted to take out a life insurance policy after they get bad news about their health. For example, a person who is just diagnosed with melanoma might want to take out a life insurance policy. A person should ask if pre-existing conditions are covered and whether or not there is a waiting period for the coverage to begin. If there is a waiting period, the person should ask whether or not any diseases diagnosed during it will still be covered if they are the person’s cause of death once the waiting period ends.

Is an Annual Physical Exam Required?

It is important to know whether or not a life insurance policy requires the covered individual to undergo an annual physical exam. If the policy does require it, the person may want to follow up with additional questions, such as which doctor can complete the exam and what happens to the premiums or coverage level if their health measures are not as good as they were the year before. For example, a person’s low-density lipoprotein (LDL) cholesterol or weight might increase. If both the LDL and weight increase, the person could have a higher risk of heart disease.

Could the Plan Be Canceled for Any Reason?

Another question to ask is whether or not the life insurance plan could be canceled by the insurer or by its owner. For example, if the client misses a payment or is late with a payment, some insurance companies will cancel the policy. Insurance companies might also cancel the policy if they find out that a person submitted erroneous or misleading information on their application. Policies could be canceled due to a lifestyle change, such as someone who starts smoking or abusing drugs. A person may also want to know if they can cancel their own policy for personal or financial reasons.

When Does the Policy End?

According to Forbes, the most important question that a person should ask before purchasing life insurance is “When does the policy end?” Another way to phrase this is, “Does the policy last until the day of death?” This is an important question to ask because some people want to have a life insurance policy in place so that their beneficiaries can collect the money. If a person has whole life insurance, the term only expires upon death. If a person lives to be 110 years old, the policy will last as long as they do.

Related Resource: 10 Best Cheap Life Insurance Companies

Each of these questions helps a person understand the policy and what they are getting for the money. A person may want to ask some other questions, too, such as how to change beneficiaries or if there are any circumstances in which the benefits would not be paid. Every person should be aware of these five questions to ask before purchasing life insurance for themselves.