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Term Life Insurance

February 15, 2012

If you have taken out a term life insurance policy, you should be reviewing it periodically and asking questions to determine if the policy still fits your needs. A review of your policy does not need to occur on a monthly basis, but every year or so it should be on your “to-do” list so you are not caught short when it is time to renew or file for benefits. Here is a list of questions you should ask your agent when reviewing your term life insurance.

Top 5 Questions to Ask About Your Current Term Life Insurance:

1. How much longer will your policy stay level? You pay your premiums every month but what you might not know is just how much longer your term policy will stay level. This is important to know so you can plan for the long term. You can usually answer this question by reviewing your policy without talking to your agent.

2. Does your policy still suit your needs? Lives change and people change. Many factors might cause you to rethink your current term life insurance policy. Are the benefits still applicable to your lifestyle? Financially, are you where you thought you would be at the origination of the policy?

3. If you were smoking when you first obtained the policy and now you have quit, will that affect the policy? Depending on the length of time since you have been smoke free, this may qualify you for a rate change, which could be substantial depending on the company. However, do not try to pull a fast one; you might be required to take a test to verify you are nicotine free.

4. If you receive a diagnosis of a terminal disease, can you take cash out prior to your death? Insurance companies refer to this as the accelerated benefit option. Your insurance company might allow you to take anywhere from 25 percent to 75 percent of the policy’s face value before you die. The remainder of the policy will be paid to your beneficiaries upon your death.

5. You let your policy lapse, can you get it back? Many companies will allow you to make good on your term life insurance policy by paying the back premiums. However, if you go beyond a certain point, usually several months to a year, you might have to apply for a reinstatement. You will still be required to pay back the missed payments of you are approved.

If you have questions about your current term life insurance policy, please click here to be connected with a licensed life insurance agent.