Life Insurance Frequently Asked Questions

A life insurance quote is an estimate of the premiums you can expect to pay for a policy. Four main factors determine your premium: your age, the amount of coverage, how long you want it guaranteed, and your risk classification. The risk classification is the most important factor — carriers consider your medical history, smoker status, height/weight, family history, motor vehicle record, and any hazardous activities. Risk classes range from Preferred Plus (superior health) down to Substandard (high risk). Because different companies assign different risk classes, working with an independent broker ensures you find the carrier offering the best rate for your specific profile.

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Yes — most carriers offer a discount for paying your premium annually instead of monthly or quarterly. Paying annually typically saves approximately 5–8% compared to monthly billing. Ask your broker to show you the annual vs. monthly premium comparison when reviewing your quote options.

There is no cost to apply. The application process is free, and if a medical exam is required, the insurance company covers that cost. You only begin paying premiums once your policy is issued and you choose to accept it.

For term life insurance, your rate is guaranteed for the entire length of the term you select — typically 10, 15, 20, 25, or 30 years. For permanent life insurance (whole life or universal life), rates are typically guaranteed for life as long as premiums are paid. Confirm the guarantee period when reviewing your policy, as some universal life policies have flexibility that can affect long-term costs.

When a policy has three different parties — the owner, the insured, and the beneficiary — it can create what is known as the “Goodman Triangle.” The death benefit paid to the beneficiary may be considered a taxable gift from the policy owner. This is an important estate planning consideration. Consult with a financial advisor or estate planning attorney if setting up a policy with three different parties.

No — misrepresentation on a life insurance application is insurance fraud. If the carrier discovers material misrepresentation during the contestability period (typically the first 2 years), they can deny the claim and rescind the policy entirely. A skilled independent broker can help you find the carrier most likely to offer the best rate given your true medical history.

A primary beneficiary is first in line to receive the death benefit. A contingent (secondary) beneficiary receives the proceeds only if the primary beneficiary has already passed away or cannot be located. You can name multiple beneficiaries and assign a percentage to each. Keep beneficiary designations up to date after major life events such as marriage, divorce, or the birth of a child.

Possibly — many carriers offer non-smoker rates to cigar smokers depending on frequency of use. Some allow up to 12 cigars per year and still classify you as a non-smoker; others allow up to one per month. Working with an independent broker who can shop your case across multiple carriers is essential to finding the most favorable classification.

It depends on the carrier. Some companies treat chewing tobacco the same as smoking, while others may offer non-smoker rates for smokeless tobacco users. An independent broker who knows which carriers are favorable for smokeless tobacco users can make a significant difference in your premium.

Yes — no-exam life insurance is available from many carriers. Options include simplified issue term life (short health questionnaire, no exam), final expense whole life (typically up to $25,000–$50,000 in coverage), and guaranteed issue policies (no health questions). No-exam policies typically cost more but offer faster approval — often within 24 to 48 hours. Call us at (888) 972-0024 to find the best no-exam option for your situation.

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Yes — but it will affect your policy. All applications ask about extreme or hazardous activities, and skydiving triggers a detailed questionnaire. Depending on the carrier and frequency of participation, you may be offered full coverage with a flat extra charge, an exclusion rider for skydiving-related deaths, or standard rates with certain favorable carriers. Working with an independent broker is essential here.

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Yes — traditional life insurance covers death from any cause, including accidents. However, Accidental Death & Dismemberment (AD&D) policies only pay out if death occurs under specific conditions such as a car accident or plane crash. If you only have an AD&D policy and die from an illness, no benefit is paid. For most people, a full coverage life insurance policy provides significantly better protection.

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Almost everyone has a need for life insurance at some point. For children, parents often purchase small whole life policies with no medical exam that build cash value over time. For adults, life insurance is important for anyone with a mortgage, loans, or other debts — and for anyone whose income supports a family. If anyone depends on your income or would be financially impacted by your death, you need life insurance.

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The face amount is the dollar amount paid to the beneficiary when the insured person dies — also called the death benefit or coverage amount. For example, a $500,000 policy pays $500,000 to your beneficiary, less any outstanding policy loans and accrued interest if applicable.

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There is no single best type — it depends on your individual needs and goals. Term life is best for short-to-medium term needs like income replacement or paying off a mortgage. Whole life is best for permanent protection and guaranteed cash value growth. Universal life offers flexible premiums suited for long-term financial planning. Many people benefit from owning both term and permanent coverage simultaneously.

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It depends on the need. Term insurance is ideal for short-term protection — covering a mortgage or replacing income during your working years. Permanent insurance is ideal for long-term protection, estate planning, and retirement planning. Many people buy both: a large term policy for maximum coverage now combined with a smaller permanent policy that builds cash value over time.

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Work with an independent broker. Online quote engines often don’t account for your medical history and give inaccurate estimates. An independent broker like Term Insurance Brokers has extensive knowledge of products across dozens of top-rated carriers and can help you compare options and navigate the underwriting process — all at no cost to you. Call us at (888) 972-0024 or get a free instant quote online.

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Cash value is the savings component that builds up inside a permanent life insurance policy (whole life or universal life). After your premium is paid, the carrier deducts the cost of insurance and charges — what remains grows as your policy’s cash value. You can borrow against it, surrender the policy for its value, or use it to pay premiums. Term life insurance has no cash value — it is pure protection only.

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There is no single best company — the right carrier depends on your age, health history, coverage needs, and budget. Different carriers specialize in different risk profiles. The key is working with an independent broker who can compare rates and underwriting guidelines across dozens of top-rated carriers simultaneously. Call us at (888) 972-0024 and we’ll find the carrier that offers you the best combination of price, coverage, and financial strength.

Yes — carriers typically limit total coverage to 20 times your annual income (some allow 25x or 30x). These limits apply across all policies combined, and existing employer coverage counts toward the limit. Your broker can help you calculate the appropriate amount of coverage for your situation.

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Yes — but your options and rates depend on the stage and type of cancer, treatment received, and how long ago you completed treatment. Most carriers require a waiting period of 2 to 5 or more years after completing treatment. It is critical to work with an independent broker who can shop your case before you apply — applying blindly risks a decline that goes on your MIB record.

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Insurance companies are heavily regulated and must go through a formal process before being declared insolvent. If a carrier fails, policies are typically assumed by another carrier or covered by your state’s Life & Health Guaranty Association, which protects policyholders up to certain limits (typically $300,000 in death benefits, varying by state). To minimize risk, always choose a carrier with an A.M. Best rating of A− or better.

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