Life insurance provides a way to leave money for your loved ones when you die. Moreover, it can provide various benefits during your lifetime. But who can qualify?
Getting approved will depend on a number of factors, including the state of your health, finances, lifestyle choices and more. Here’s a closer look at life insurance in general and how to qualify.
What is life insurance?
is a type of insurance coverage that pays a death benefit to your chosen beneficiary when you die. It can help cover your end-of-life expenses, pay off your outstanding debts and provide financial support to your dependents after your death. Additionally, permanent life insurance policies include a cash value component that can function as an investment vehicle and a source of funding during your lifetime.
If you don’t currently have life insurance or aren’t satisfied with your current plan, check out your options and compare rates now.
Like most insurance policies, life insurance requires you to choose the amount of coverage you want and pay your premiums to maintain coverage. When you die, your beneficiary can file a claim and receive the death benefit payment. That said, there are different types of life insurance, so it may work out differently depending on the plan you choose.
How to qualify for life insurance
When it comes to qualifying for life insurance, providers will assess your life expectancy. Their income comes from premium payments, so they have to estimate how long you will make the payments before paying the benefit. ABOUT, they estimate the likelihood that they will have to pay the benefit at all. Common factors considered include an applicant:
- Height and weight
- Health conditions
- Family health history
- Driving record
- Criminal history
- Dangerous hobby
- Lifestyle habits
- Financial information
The longer your estimated life expectancy, the better your chances of getting affordable life insurance coverage. It never hurts to have a backup plan on top of your income and other investments. Start browsing life insurance plans today.
Just note: You may have difficulty getting coverage in certain circumstances, such as if you have a serious pre-existing health condition, take part in dangerous activities such as skydiving or are an alcoholic.
How to get life insurance
How do you go about getting life insurance? Here are four steps you should take.
- Determine your needs
- Shopping around
- Register and make a payment
Determine your needs
A good first step is to assess your needs. Considerlike:
- Covering your funeral and burial expenses
- Providing financial resources for dependents after your death
- Settlement of unpaid debts and taxes
- Leaving behind a tax-free legacy
- Earning an investment account that offers tax-free growth
- Creating a source of credit for the future
Then think about whether you need it temporarily or want it for life. From there, you can estimatefor any purpose and in general.
With an idea of the type of life insurance you want and the amount of coverage you need, start your search for a provider. Get a free quote in minutes.
Life insurance companies vary in their offerings, qualification requirements, costs, payment options and more. Shopping around can help you find the best deal. Once you find a few companies that look good, contact them to get quotes. Quotes are often based on a few basic questions and give you a clear idea of what a company will offer.
After collecting a few quotes, decide which company’s offer looks best and then apply with that insurer. Life insurance applications often include a long set of questions about your health, finances and lifestyle. Insurers may also require you to undergo a medical examination by a licensed physician. Once you’re done, you’ll find out if you qualify and the premium rate available to you.
Register and make a payment
If the life insurance policy ends up being a good fit for your needs and budget, you can sign the paperwork and make your first payment. While monthly payments are common, you can also usually choose to pay on a quarterly, semi-annual or annual basis. You will have coverage under the contract as long as you continue to make your payments on time.
Life insurance can not only help take care of your loved ones after you die, but can serve as a source of funding and an investment vehicle during your lifetime. Not sure where to start your search for coverage? Here they are
What are the different types of life insurance?
Life insurance is not the same for everyone. The main types you can choose from include:
- Term life insurance: Term insurance provides temporary coverage for a specified period – often 10, 15, 20 or 30 years. If you die during the term, your beneficiary receives the death benefit. If you don’t, no payment is made. Depending on the insurer, you may be able to extend or convert term policies when they expire.
- Whole life insurance: Whole life insurance offers permanent coverage with fixed premiums, a guaranteed death benefit and a guaranteed rate of return on the cash value component. It stays in place as long as you make the required payments.
- Universal life insurance: Universal insurance is also permanent coverage with a cash value component. However, premiums are adjustable, cash value is not guaranteed and the death benefit can be flexible. Flexibility can make your lifetime insurance more affordable, but it doesn’t come with lifetime insurance guarantees.
While term life insurance is often the cheapest option, it only provides coverage for a set period. There is no payment to your beneficiaries if you pass the policy. Additionally, there is no cash value component. However, this may be the best route if you want the most affordable coverage for a limited time – such as when you’re raising children and paying off a mortgage. Full and universal coverage offer more benefits but come at a higher cost.