27 Questions to ask when buying a life insurance policy

Do I need life insurance?
It’s wise to consult a financial advisor or insurance agent to determine if you need life insurance, for how long, and in what amount. A general rule: if anyone, typically your spouse or children, would face financial hardship after your death, life insurance may be a worthwhile consideration.


What type of life insurance should I buy?
Several life insurance policies—such as term life, whole life, and universal life—are designed to meet specific needs and budgets. Decide if you want temporary or permanent coverage (for a set number of years). A licensed agent can help you understand your options.


How long should my coverage last?
Choosing the proper term length is critical:

• 10–15 years: Useful for short-term needs like paying off a loan or covering children until adulthood.
  
• 20–30 years: Better for long-term goals like paying off a mortgage, raising kids, or ensuring long-term support for a spouse.
  

Your coverage should match your family’s life stages—don’t hesitate to share your goals with your agent.

Is there a waiting period before coverage takes effect?
Some policies start coverage immediately, while others have a waiting period—usually one to two years—before the full death benefit is available. If you pass during this period, your family may only receive the premiums paid or a reduced benefit.


Do I need life insurance if I have coverage through work?
Employer-provided policies often offer limited coverage, usually enough for burial expenses. If this doesn’t fully protect your family, consider supplemental coverage.


How much does life insurance cost?
Premiums vary based on age, smoking status, medical history, lifestyle, occupation, and policy type. Always ensure your policy fits your budget.


What are the monthly and annual premiums?
Premiums can be paid monthly, semi-annually, or annually, with potential discounts for paying annually. Rates depend on age, health, and risk factors like driving or lifestyle.


Is a physical exam required?
Some policies require a medical exam to assess risk and determine premiums. Exams are usually free and can often be done at home. In some cases, no-exam policies are available.


What lifestyle factors affect my premium?
Habits like smoking, high-risk hobbies, or certain occupations can impact your premiums both before and after the policy takes effect.


What happens if I miss a payment or pay late?
Missing payments may lead to policy lapses or cancellation. Some policies offer a grace period—ask your agent about your specific plan.


What happens if I move to another state or country?
Most policies remain valid across states, but insurance laws differ. International moves may require adjustments. Always confirm with your agent.


Does the policy have any cash value if I cancel?
Term policies don’t have cash value. Whole or universal life insurance may accumulate cash value, which you can borrow against or surrender for money. Keep in mind that surrendering your policy ends the death benefit.


How long has the insurance company been in business?
A company’s longevity and financial strength are key indicators of reliability. A quick search or a conversation with your agent can help confirm this.


Is the insurance company reputable?
Check reviews and complaint history on the National Association of Insurance Commissioners (NAIC) website to assess the company's credibility.


Can I increase or decrease my coverage after the policy starts?
Some policies allow you to adjust your coverage later. Others do not. Ask about flexibility before committing.


How are benefits paid out?
Beneficiaries typically choose how they receive payouts—lump sum or installments. Confirm available options with your provider.


Are there situations where benefits aren’t paid?
Exclusions may include suicide (within a specific period), criminal activity, fraud on the application, or death during the policy’s waiting period. Ask your agent to clarify these exceptions.


How long does it take for benefits to be paid?
Payouts typically take 1–2 weeks but vary depending on documentation and claim processing. Timeliness is crucial if you rely on the policy to cover burial or immediate expenses.


Are there fees to apply?
Most companies do not charge an application or quote fee. Still, it’s wise to confirm upfront.


Can my premiums change over time?
Term life premiums may increase at renewal based on age or health. Whole life premiums are generally fixed, while universal life may fluctuate. Ask how your policy handles changes.


Does life insurance cover disability?
Standard policies don’t cover disability. Consider adding a disability rider or purchasing separate disability insurance to cover lost income.


Does the company offer final expense insurance?
Final expense insurance covers burial and small debts. Depending on your needs, it might be a good fit. Ask your agent if it’s available.


Can the insurance company change my benefits after the policy starts?
Changes are rare once a policy is active, but it’s best to ask how future adjustments might affect your benefits.


What happens if the insurance company is sold or merged?
Policies are typically honored through acquisitions, but it's good to ask how transitions might affect your plan.


Who should I name as a beneficiary, and can I change them?
Beneficiaries should be people or entities who would suffer financially from your loss. You can change your beneficiary at any time.


Does the policy offer living benefits?
Many policies provide living benefits, such as:

• Cash value (permanent policies): You can borrow against or withdraw from this.
• Living benefit riders:
  
  • Accelerated death benefit: Access funds if terminally ill.
  • Chronic/critical illness riders: Provide support if you can’t perform daily activities.
  • Waiver of premium: Keeps your policy active if you become disabled.
  • These options can reduce your death benefit, so weigh them carefully.

How much life insurance should I get?

Think about:

• Everyday expenses: Monthly bills, groceries, utilities.
• Debts and long-term obligations: Mortgage, loans, education costs.
• Future goals: College savings, legacy giving, spouse’s retirement.

Talking through these with an agent will help you find a coverage amount that genuinely fits your life.

Preparing with these factors in mind can help jumpstart and make your conversation with a life insurance agent much more productive. They’ll help you turn your vision into a specific coverage plan that meets your current and future needs.