When you decide it’s time to purchase life insurance, you’ll probably have a few questions about coverage, policy types, and whether or not you’re likely to be approved for your desired policy.

Asking these questions is extremely important. The outcome will determine your status of approval, your monthly premiums, and the extent of financial protection and preparedness that your family will receive in the event of a loss. Taking a proactive approach to alleviating what could be a huge financial burden is an admirable gesture – one that will bring you peace in knowing that even if you’re not present, your family will be financially stable.

If you’re having trouble deciding what questions you need to ask before settling on what the best life insurance policy is, don’t fret. We’ve compiled a list of the most important questions to consider when purchasing life insurance so that you feel confident in your decision.

I have a pre-existing medical condition. Will this affect my eligibility for life insurance?

The short and simple answer to this question is yes. However, while your pre-existing medical condition will most likely influence your approval and premium in some way, the level to which your medical condition affects your policy and eligibility is entirely dependent on the severity of your condition, how well it is managed, your prognosis, and the amount of liability that the insurance company is willing to assume.

If your condition is well managed and you are otherwise healthy, it is likely that the policy underwriters will deem you eligible for the policy of your choice, at a slightly higher premium than individuals that do not have a medical condition. If your medical condition is not well managed and you are in poor health, you may be denied for coverage for most whole life policies and may benefit from considering term life insurance or a no medical exam policy – and again, your condition may influence your premium.

Regardless of your health standing, there is usually a policy option for everyone, and it is worth the peace of mind to secure a policy if you can afford to do so.

Do I have to get a physical exam in order to be approved for life insurance?

Unless you’ve chosen a no medical exam life insurance policy, you should expect to be required to receive a physical exam – complete with routine bloodwork, and additional bloodwork if you’ve reported a pre-existing medical condition. The insurance company will use this information to determine how well your condition has been managed and whether or not they are willing to assume liability and grant you a policy. The results will also influence your premium amount.

How much life insurance coverage do I need?

How much life insurance coverage you need is dependent on what finances you will need remedied or replaced in the event of the passing of the policyholder. When deciding how much coverage your family will need, be sure to account for debts (to include mortgage, car payments, loans and credit cards), monthly payments, and lost wages. Totaling these amounts will help you better visualize exactly how much coverage you will need.

Will my policy generate cash value?

Whether or not your policy will generate cash value depends on the policy type. Term life insurance policies build no cash value, they simply guarantee payout of the death benefit should the policyholder pass while holding the policy. Whole life insurance is the policy type that builds valuable cash value – a benefit that you can utilize while living if needed.

To find out whether your policy builds cash value, speak with a qualified independent life insurance agent.

Can I retain coverage indefinitely?

If you’ve chosen a whole life policy, you can retain coverage for as long as you continue to pay the premiums. If you’ve chosen a term life insurance policy, you will only retain coverage for the duration of the agreed upon term.

Understanding why you should have a life insurance policy in place is the first part of the decision. Knowing which type of policy to hold and what questions to ask about those policies is the second.

If you have any additional questions about life insurance policies, please comment or send us an email.