Life Insurance Quotes

"When it comes to insurance, what you don't know can hurt you financially," warns former Texas Insurance Commissioner Jose Montemayor. "Knowing about discounts, rate guides and how to file a complaint can save consumers money as well as a lot of grief."

Before you start shopping for an insurance policy, take a look at this list of common questions about life insurance.

What happens if I don't pay the required premiums?
Typically, you will have a 30- or 31-day grace period. If you pay within this time period, your policy will continue in force. If you don't pay within the grace period, your policy may lapse, depending on the type of policy you purchased. With a permanent policy, however, your life insurer may use your cash value, if available, to cover premium payments.

If you are unable to pay because you have become disabled, and you elected a "waiver of premium" provision or rider on your policy, you do not have to pay premiums for the duration of your disability. Certain other insurance policies, known as universal life insurance policies, generally offer policyowners increased premium flexibility that may be important when cash flow is variable.

What if my policy lapses?
A policy (other than universal life insurance) lapses when you fail to pay your life insurance premium by the end of the grace period. If you have a permanent life insurance policy and enough cash value in it, you may borrow from the policy to pay the premium. If you have a term life policy and don't pay your premium within the grace period, your policy will lapse and simply end.

Do I need life insurance if I'm a young, single person?
An advantage to buying life insurance now is your premiums will be low. If you have dependents in the future, you will have locked in the lowest rates and you will have guaranteed your "insurability," meaning you won't have to worry about higher rates in the future as you age and possibly have declining health.

Are there cases in which I don't have to take a medical exam to buy life insurance?
Group policies don't require medical exams. Unless you are buying supplemental group life, or asking for a higher amount than the standard coverage level for the policy, you don't have to provide medical documents. Most group life insurance enrollments are held annually through your employer.

"Simplified issue" policies require that you answer some medical history questions but don't require an exam.

"Guaranteed issue" policies require no medical exam or medical questions, but you will pay significantly more in premiums than you would with an underwritten policy, even if you've had some health issues.

What do insurance companies look for in the medical exams?
You will be classified based on age, height, weight, nicotine use and other health factors, such as any history of high blood pressure or depression. Your health status will determine what rate class category you fit in, so even if you have some health problems, you could be covered. Your agent or insurance company should explain what criteria determine the class into which you fall.

If you don't qualify for their best rate today, you might be able to improve your rate category if certain health factors improve. For example, say a 35-year old woman buys a life insurance policy. She is 50 pounds overweight, has high blood pressure and is trying to quit smoking. Two years later, her policy is still in force and she has lost 50 pounds, her blood pressure is normal and she has been nicotine-free for a year. She could talk with her agent about possibly reducing her premium rates.

If the medical evaluation showed a new health condition for which she would be classified into an even higher rate category, she would remain at her current rate. The insurance company would not reclassify her into a higher rate bracket.

Can I buy a policy on someone else?
Yes, but only if you have an "insurable interest" in that person. This usually means a relative, spouse, a domestic partner or live-in companion, or a business partner.

Can I buy a policy on someone else without them knowing about it?
Although there are certain exceptions in some states (a husband or wife, for example, may be able to purchase insurance on his or her spouse), the answer to the question is generally "no." You cannot take out an insurance policy on someone else's life without his knowledge and consent.

Can I name anyone I want as my beneficiary?
Yes, you own the policy and you can name whoever you want as the beneficiary. While many people choose only their spouse, it is possible to name more than one person as a beneficiary. For example, if you have a $100,000 individual life insurance policy, you could name your spouse and four children to share in the policy equally at $20,000 each.

Do life insurance policies ever cancel each other out? If I have a credit life policy and a whole life policy, will one not pay out?
No. Upon your death (assuming you have paid all the necessary premiums), the credit life policy will pay out according to the terms of the policy (paying off the specific debt) and the whole life will pay out its full death benefit to the beneficiaries named.

Former Alabama Insurance Regulator David Parsons says regardless of the type of life insurance policy you buy, make sure you get all the facts about the policy and your other options.

"It's about making sure your family is properly covered," says Parsons, who urges all insurance customers to take advantage of the consumer services offered by their states. "We believe state insurance departments are the best resource for insurance-related questions and concerns," Parsons says.