Jim Mentink, Life Insurance Agent

Answer: There isn't a set age when someone should start thinking about life insurance. However, if someone is old enough to ask this question, they are old enough to think about life insurance. There are many variables, of course.

Folks who are about to have a new child, buying or building a home, between jobs, don't have enough life coverage with their current job, etc--at ANY age--can consider life insurance.

If someone is thinking about life insurance for themselves, it's a good idea to consider getting covered when you are young. Premiums will be lower and whole life policies will maintain a static premium as long as they are paid (and build cash value).

As many parents will have policies on their children until they are adults (and beyond frequently), many people will start thinking about a policy for themselves when they begin to become more autonomous.

Answer: Are you an independent or captive agent? (Put another way, do you represent me or the agency?)

How long is my premium good for? (Should be expressed proactively; but if not, a good question).

How can I change beneficiaries?

Are there any risks with this policy?

How much coverage do I need?

Do I actually need life insurance?

What happens if I miss a payment?

Another good question to ask independent agents is if you're getting the best benefit for the price. Many agents will lead with a particular carrier because they have a good reputation, competitive pricing, or their organization has a long relationship with them--things like that. It's okay to ask for another carrier's price and ask them to compare the benefits of each.

Answer: By asking the right questions.

Determining if they're looking for something short-term (out of work, bought a house, had a baby, etc) or permanent (wanting to build cash value, static premium for life as long as premiums are paid). Finding this out alone can guide the conversation.

In some cases, maybe the client has less resources but expects to have some within a period of time. Since term life is less expensive for a larger death benefit, sometimes this makes sense until they can get into a whole life policy.

Ultimately, learning their overall goals and needs is critical for guiding them in this decision. Oftentimes clients will have a blend of both.

Answer: Carriers vary widely on their underwriting for pre-existing conditions. It's imperative that potential clients be very honest with their agent about conditions because the underwriters will find the medical history. The process is much smoother when all the cards are on the table.

That said, there are definitely options for people with pre-existing conditions. Many of the "simplified issue" carriers will work with these, though they might be graded in a way that premiums might be higher.

It's also worth noting that there are some "guaranteed issue" carriers, though be aware the premiums are typically higher.

Answer: A beneficiary receives the death benefit on a life insurance policy.

The contingent beneficiary receives the death benefit on a life insurance policy if the primary beneficiary (above) has passed away, refuses the payout, or in any other way is unable to receive the benefit.

Answer: Maybe. The reason we'd say that is because even being retired and having a mortgage paid off, there can be other financial obligations some might hold. Also, the cost of burials is increasing, as is cremation.

Some individuals have family members that can cover the costs of burial and funeral, but often we don't want them to have to worry about that while they're grieving the loss of someone important to them.

Discussing your situation with an agent would help clarify whether it's needed or not.

Answer: Typically these are going to be riders that will waive the premium for a period of time if you become unable to work due to a disability. If your policy has this, it's important to understand the duration you can have that waiver.

Answer: Level term features a consistent premium payment with a death benefit that also stays consistent. You make the same payment for the term and if you pass, the full death benefit is available.

Decreasing term features a consistent premium payment with a death benefit that *decreases* over time. Usually these are used with, for instance, a mortgage that decreases over time.

Answer: Some carriers will offer a 30 day free look window wherein your initial premium is usually refunded if the policy is canceled within that timeframe.

Not all carriers offer that, and it's always best to check with the carrier or agent what the cancelation rules are (surrender fees? refund? cash value rules?).

In short, you can cancel most policies but rules may differ.

Answer: There are several steps you can take. One is to look over the loved one's personal effects and documents to determine if they had one. Checking things that might be linked to an insurance agent or an estate manager might be helpful. You can look at their state's website for unclaimed property as another lead. Finally, you can check the NAIC policy locator using their name and death certificate information--it's a free service that can help you find the carrier your loved one had.

Answer: Yes, usually, some changes are still possible after you buy the policy. You can normally change things like the beneficiary, payment date, contact info, and in some cases (depending on carrier) there can be changes to coverage amounts or riders being removed or added.

Usually you can't change the insured person, policy type, original premium rate, or health rating.

Answer: One way is to research individual carriers and the policies (and features of those policies) and get quotes from the products that make sense for you. Another way, which for many ends up being more time-effective and normally produces a more personalized policy, is to work with an independent agent who can use their tools to pinpoint the carrier that best suits you and what you're looking for.

Answer: Normally the cash value does not get paid out to beneficiaries upon death of the insured. The death benefit only, minus any unpaid loans, is provided to them.

That said, some carriers do offer policies that provide death benefit and cash value. An important thing to remember is that cash value is part of the insurance contract, not a separate "bank account". The policyowner can control the cash value but not own it.

Answer: Simplified issue life policies typically are provided with minimal medical information on the insured, and usually no fluids are needed.

Guaranteed issue life policies are just that: guaranteed. However, even with them the carriers will often have maximum age they'll cover.

Answer: Mortgage protection insurance is not different from regular life insurance in that it provides a death benefit. Mortgage protection is a term life policy, usually for the amount of the mortgage, that will provide a benefit should the insured die, thus allowing the mortgage to be paid off.

Some MP policies will have a decreasing death benefit as the mortgage is paid down respectively, though the premiums will normally remain the same. Some policyowners prefer a regular term plan with a benefit to cover their mortgage payments, knowing that as the loan is paid down, their beneficiaries will use the difference for necessities like burial, school, medical bills, anything at all.

Answer: Maybe, maybe not. The coverage employers usually provide for employees is sometimes only 1x salary, with a buy-up option that the employee pays for. This can be an affordable option while you're working.

One thing to consider is the fact if you leave the employer, that coverage ends. If it is convertible, it can get expensive. These are things worth thinking about.

Finally, whether or not the life insurance you get through your work is enough is also highly subjective. The rule-of-thumb is 8-10 times your salary, although some experts recommend a minimum of $1M. Ultimately it depends on many factors including needs of your family, medical or schooling costs, and standard of living.

Answer: In most cases, yes. It can depend on the carrier, as well as the severity of the anxiety or depression, whether one is on medication, how it is managed, etc.

But it's not an automatic disapproval. Depending on the above factors, it may affect the underwriter's rating, but in many cases a policy is possible.

Answer: You can switch, yes. However, you want to be certain you time it right. It's best to wait for the new policy to be in force (not just approved), pay the first premium and confirm the start date in writing. Then you can cancel the previous policy.

You want to also be aware of any surrender charges or cash value from the previous policy.

Answer: Very generally, yes, depending on how recent the DUI is. With a recent DUI, the application could be declined, however a DUI doesn't automatically exclude you in general.

Be honest on your application and be prepared for a potentially higher premium (depending on the timing of the DUI).

Answer: The overwhelming majority of term life policyowners do outlive their policy. And, ultimately, that's a good thing because you stayed alive! But term life should be seen as a complement to a whole life policy, or as a temporary need anyway (i.e between jobs, while children are growing, when there's a mortgage).

But because term life policies aren't cash value products, you don't normally get something after the term ends.

Two things to keep in mind: term policies can often convert to whole life policies (and you may not have to go through underwriting again), and some carriers offer 'Return of Premium' riders where, by outliving the term, you receive a percentage of the premiums back.

Answer: The insurer can deny a claim, or rescind the policy. If the lie is discovered during the contestability period (normally the first couple years of the policy), a further investigation can take place which can result in that previously mentioned claim denial if the insured's death takes place within that time frame. It will also increase your chances of getting declined coverage in the future.

Answer: There are variables on this, of course. Such as whether the 20-year-old is healthy, whether they're male or female, and if they're getting a term life policy or a permanent whole life policy (that can earn cash value).

Generally, though, a healthy 20-year-old can expect to pay around $15-$18 a month for a term life policy with a death benefit of $500,000. It goes up or down from there depending on coverage needs.

Answer: An indexed universal life policy is a permanent policy. A term life policy is coverage that lasts for a 'term', which is a set amount of time usually ranging from 10-30 years (not all carriers have terms that long but that's a general guideline).

IULs can earn cash value and a lot of folks do get a policy for children, for instance, so the value can grow over a lifetime. IULs are tied to index performance and will experience gains, and many have a 0% floor to protect policyholders from loss.

Term life is for a period of years and if renewed the policyholder will pay more for the next term, though some policies can be converted and others do offer a return-of-premium.

Answer: The best way is to go to your state's professional licensing/regulation website and enter the agent's license number there. It will usually show you if they are active, are working toward required CE credits, etc.