Questions to Ask Before Choosing a Life Insurance Policy

Questions to ask yourself first

Who depends on me financially, and for how long? What would they need to pay for if my income stopped? What can I comfortably afford each month, in a good year and in a tight one? A policy that lapses because the premium was too high protects no one.

Questions about the policy

How long does the coverage last? Is the death benefit level, or can it change? What is not covered, and are there any waiting periods? What riders are included, which cost extra, and what does each one require before it pays?

Questions about the cost

Is the premium guaranteed to stay the same, and for how long? If it can change, what would cause that? For a policy with cash value: what charges are deducted, which values are guaranteed and which are not, and what happens if I pay less than planned?

Questions about changing your mind

Can I convert a term policy to permanent coverage, and until when? What happens if I miss a payment? If I cancel, do I receive anything back? Most states also provide a "free look" period after delivery, during which a new policy can be returned for a refund; ask how long it is for the policy you are considering.

Questions about the company and the person

Which insurance company issues the policy, and what are its financial strength ratings? Are you licensed in my state, and may I have your license number? Which carriers can you offer, and why are you suggesting this one for me?

A professional who welcomes these questions is a good sign. You can verify an agent's license through your state insurance department.

Before you sign

Read the application before signing and check that every answer is accurate. Ask for anything you were promised to be shown to you in the policy itself. If something is unclear, it is reasonable to take a day and ask again.