Life insurance is one of the most important financial decisions you can make. It protects your family, pays off debts, replaces income, and provides long-term financial security. But with so many policy types, coverage options, riders, and industry terms, it can be overwhelming to know what truly matters.
Asking the right questions before buying life insurance ensures you get the right policy, the right amount of coverage, and the best long-term value. This guide breaks down the most important questions to ask—and why they matter.
1. What Type of Life Insurance Is Best for My Situation?
There are two main types of life insurance:
Term Life Insurance
Covers you for a set period—typically 10, 20, or 30 years. It is affordable and ideal for income replacement during working years.
Permanent Life Insurance
Includes whole life, universal life, indexed universal life (IUL), and variable universal life (VUL). These provide lifelong coverage and may include a cash value component.
Ask your agent or insurer:
- Should I choose term, whole, or universal life based on my goals?
- What are the pros and cons of each?
- What happens if I want to change my coverage later?
Understanding policy types is the foundation of choosing the right plan.
2. How Much Life Insurance Coverage Do I Need?
Your coverage amount—called the death benefit—should be tailored to your financial responsibilities.
Ask:
- How did you calculate my recommended coverage amount?
- Does the estimate include income replacement?
- Does it account for debts, mortgage payoff, or children’s education?
A common guideline is 10–15× your annual income, but individual needs vary.
3. How Long Should My Coverage Last?
If choosing term life insurance, the length of the term matters.
Ask:
- Should I choose 10, 20, or 30 years?
- How does the term length affect my premium?
- Will my coverage end before major financial responsibilities (like a mortgage) are paid off?
A well-chosen term ensures your loved ones are protected during the years they need it most.
4. What Will My Premium Be—and Will It Stay the Same?
Premiums differ by policy type.
Ask:
- Are my premiums guaranteed to remain level?
- Will they increase later?
- Are there benefits or risks with choosing a flexible premium policy?
For term life, level premiums are often ideal. For permanent life, understanding cost changes is essential.
5. What Happens if I Miss a Payment?
Policies vary on grace periods and reinstatement rules.
Ask:
- How long is the grace period?
- Can the policy be reinstated if it lapses?
- Are missed payments deducted from cash value (if applicable)?
This prevents accidental loss of coverage.
6. What Riders or Add-Ons Should I Consider?
Life insurance can be customized with riders that add valuable protection.
Common riders include:
- Accelerated death benefit
- Waiver of premium
- Child term rider
- Return of premium
- Accidental death benefit
- Long-term care or chronic illness riders
Ask:
- Which riders do you recommend?
- How much do they cost?
- Are these riders guaranteed, optional, or medically underwritten?
Riders can significantly increase the usefulness of your policy.
7. Are There Any Exclusions?
Most policies have limitations on when benefits are paid.
Ask:
- Does the policy exclude death by suicide within a certain period?
- Are there exclusions for risky hobbies or travel?
- What situations might prevent the payout?
Understanding exclusions avoids surprises later.
8. How Does the Underwriting Process Work?
Underwriting determines your final premium and approval.
Ask:
- Will I need a medical exam?
- How long does approval take?
- Are there simplified-issue or no-exam options?
- Can my rate increase based on health conditions?
Knowing the process helps you prepare for possible delays or requirements.
9. How Does This Company Handle Claims?
Life insurance should be easy for your family to use.
Ask:
- What is the typical claim processing time?
- What documentation will my beneficiaries need?
- Are claims paid as a lump sum or installments?
A smooth claims process eases financial stress for loved ones.
10. What Happens When the Policy Term Ends?
For term life policies, ask:
- What happens when the term expires?
- Can the policy be renewed?
- Is renewal guaranteed, or will it require new underwriting?
- Can I convert to a permanent policy later?
Conversion options can be crucial if your health changes.
11. Can the Policy Be Converted to Permanent Coverage?
Term policies often offer a guaranteed conversion option.
Ask:
- Until what age can I convert?
- Can I convert the full amount or only part of it?
- Which permanent policies can I convert into?
Conversion options add flexibility as your financial needs evolve.
12. What Fees or Charges Apply to Permanent Life Insurance?
Permanent policies include administrative fees, cost-of-insurance charges, and sometimes investment fees.
Ask:
- What fees are included?
- How does the cash value grow?
- Are returns guaranteed or variable?
- What happens if the cash value drops?
Understanding fees helps you evaluate long-term performance.
13. Are There Discounts or Ways to Lower My Rate?
Life insurance rates depend on age, health, lifestyle, and policy type.
Ask:
- Will quitting smoking reduce my rate later?
- Are healthy-living discounts available?
- Will paying annually instead of monthly reduce my premium?
Even small changes can lead to meaningful savings.
14. How Often Should I Review My Policy?
Your life changes—and so should your coverage.
Ask:
- Should I review my policy annually?
- Should I update my coverage after major events like marriage or having a child?
- Will I receive notices about important policy changes?
Policy reviews help ensure ongoing financial security.
Final Thoughts
Life insurance is a cornerstone of financial planning. Asking the right questions before buying ensures your policy aligns with your goals, protects your loved ones, and provides long-term value. By understanding policy types, coverage amounts, riders, exclusions, underwriting, and conversion options, you can make confident, informed decisions.
Smart policyholders don’t just buy life insurance—they ask the right questions first.