What Is The Life Insurance Application Process?

Acquiring the quality life insurance protection you need involves three steps: the first is preparing and submitting the application; the second is the underwriting review and approval; and the third is the policy issue and delivery.

Are Life Insurance Benefits Taxable?

As a general rule, policy benefits are not subject to income tax, but are includable in a deceased policy owner’s estate for estate tax liability. Many high net-worth individuals utilize an Irrevocable Life Insurance Trust to remove the value of life insurance policy benefits from their taxable estate. Also, payment of the policy benefit avoids the hassles and delays of probate unless the estate of the deceased insured is named as the beneficiary.

Do I Need Individually-Owned Life Insurance if I Have Employer-Provided Group Coverage?

Many companies provide employees group life insurance worth once or even twice their annual salary. These are nice benefits, but if you leave your company without a separate policy in place, it may be difficult or even too late to purchase one when you need it most.

While participating in your group life insurance can be a good idea, group insurance typically does not provide an adequate level of benefit to meet all of your needs. Coverage typically ceases if you change jobs or retire and even if the group plan allows you to convert to an individual policy, this policy will typically have high premium costs compared to individually-owned policies. As a general rule, group life insurance benefits participants who are in average or poor health at the expense of participants who are in good to excellent health.

Do I Need Individually-Owned Life Insurance if I Have Military-Provided Group Coverage?

The answer is probably "yes" because:

  • Servicememebers' Group Life Insurance (SGLI) coverage ends with your service and the range of available life insurance options available to you at that time may be limited by age or health issues.

  • Veterans' Group Life Insurance (VGLI) benefits increase in cost as you get older and will not cover your spouse and family members.

Should I Purchase Life Insurance On My Spouse?

If your spouse contributes to the family's income, then that stream of income needs to be replaced in the event of death. If you spouse does not earn an income, life insurance still plays an important role in helping to pay for valuable services he or she provides - for example, providing child care, elder care, or maintaining the home and managing the household.

Should I Purchase Life Insurance On My Children?

You can generally purchase life insurance at the lowest possible premiums at younger ages. Purchasing the same amount of coverage when your child becomes an adult will typically cost more. Also, purchasing life insurance on a child can help ensure that he or she has life insurance protection for life and "protect insurability" if the child develops health problems and becomes uninsurable. In many cases, grandparents purchase a life insurance policy for the child naming the parents as beneficiaries and then transferring ownership of the policy to the grandchild when he or she reaches an age when they are able to appreciate the value of the life insurance policy.

Which Life Insurance Company Is Right For Me?

Virtually all of the top-rated life insurance companies offer a variety of term and permanent policy options. We can recommend various policy options to meet your individual needs. While price is always a major consideration, there are other factors to consider, such as a company's ratings and commitment to policyholder service and underwriting philosophy as well as your agent's level of experience in working with a particular company. With permanent policies, consider only companies with a demonstrable commitment to conservative interest rate, mortality cost, and expense assumptions and a track record of sound investment performance. Also, make sure that existing policyholders and new policyholders earn the same rates of interest on their respective policies. There is no substitute for company and product integrity. We are managing general agents for several of the nation's leading companies such as: American General Life, Protective Life, West Coast Life, Genworth Life and Annuity Company, North American Company for Life and Health, ING/ ReliaStar Life, Prudential Life, and many others.