10 Key Questions to Ask Your Life Insurance Advisor
Estimated Reading Time: 6m
Getty Images
When it comes to life insurance, everyone has questions—and that’s a good thing. Because the more you know, the better prepared you’ll be to make an informed decision.
Got a lot of questions? No problem: That’s what your life insurance advisor is there for. Here are 10 key questions to ask a life insurance advisor before choosing coverage
Quick Answer: Choosing the right life insurance policy starts with understanding your family's needs, financial obligations, coverage options, and long‑term goals. Asking the right questions can help you determine how much coverage you need, which type of policy is best for you, and how to protect your loved ones financially.
Do I Really Need Life Insurance?
If someone depends on your income or financial support, life insurance may be an important part of your overall financial planning. The amount and type of coverage you need will depend on factors such as your family's income needs, debts, existing assets and long‑term financial goals.
If something happens to you, your life insurance benefits could help replace that lost income. For example, your family would have funds to cover your final expenses, pay off your debts, and provide for their ongoing living expenses.
Life insurance can help protect your loved ones from financial hardship if you’re no longer there to provide for them. New to life insurance? Learn more about what life insurance is and how it works.
How Much Life Insurance Will I Need?
As a starting point, consider enough life insurance to cover financial obligations that continue even after you’re gone.
To determine the total, tally your current financial needs—your family’s living expenses, mortgage, debt, etc.—and future needs, such as your children’s education. If you don’t have dependents, estimate what your final expenses might be.
If you have a spouse or partner, do this together. It’s a family decision. In fact, many couples find it wise to buy life insurance together.
But I Don’t Have Dependents …Do I Still Need Life Insurance?
You may still have a reason to consider life insurance even if no one depends on your income. Life insurance can help provide funds for expenses and financial obligations you may leave behind, depending on your circumstances.
These may include funeral and other final expenses, certain debts or other financial responsibilities.
A modest life insurance policy can help cover these costs, sparing family and friends the burden of shouldering your remaining unpaid bills. That’s why many people without direct dependents still carry life insurance.
How Much Does Life Insurance Cost?
Life insurance premiums may be more affordable than you think. More than half of us overestimate the cost of life insurance by 300%!
The best way to understand what life insurance may cost you is to request a personalized quote. That’s what your advisor is for. Ask them to run a few quotes and review the illustrations with you.
What’s the Best Age to Get Life Insurance?
There is no single best age for life insurance. The best time to get it is as soon as you determine you need it, whether it’s because you have loved ones who depend on you or you want to plan for other financial obligations and goals.
But keep in mind: age and health are among the factors that insurers may use to determine eligibility and premiums. In general, purchasing coverage when you're younger and healthier may result in lower premiums than waiting, although rates depend on the policy and underwriting.
What Type of Life Insurance Is Right for Me?
There are two main types of life insurance: term and permanent life. Which type is best for you depends on your goals and situation.
In brief, term life is more affordable and provides coverage for a set period of time. Permanent life insurance is designed to provide long‑term coverage and may build cash value, subject to the terms and conditions of the policy. Permanent life insurance also generally costs more than term life insurance.
Learn more about the differences between term and permanent life insurance and discuss which option may fit your needs with a PALIG advisor.
What Is Life Insurance Cash Value?
Cash value is a separate component of permanent life insurance that’s offered in addition to the death benefit. Depending on the policy, cash value may be accessed for different financial needs.
With permanent life insurance that builds cash value, part of the premium supports the policy’s insurance costs and other charges, while cash value may accumulate according to the terms of the policy. You can then access this accumulation through policy loans, withdrawals or by surrendering the policy. Keep in mind that loans, withdrawals or surrendering the policy may affect its cash value or death benefit.
When your advisor prepares a permanent life illustration for you, you’ll see how your cash value would accumulate over time.
Isn’t My Employer’s Life Insurance Enough?
It may be. But you need to review your coverage to know for sure, based on your financial needs and the specifics of your employer’s plan.
Depending on the plan, employer‑provided life insurance may:
- Provide term life insurance, which only lasts for a set period of time and may end when your employment ends.
- Provide a flat benefit or multiple of salary, which may not be enough to cover your financial obligations.
- May not be portable, which means you may not be able to take your coverage with you if you leave the company.
If you aren’t sure what your employer coverage is, ask your advisor to review your paperwork with you. It can also help your advisor understand your existing coverage and make more personalized recommendations.
How Do I Know If I Need to Buy More Coverage?
Changes in your life or financial obligations are a good reason to review your coverage. For example, you’ll likely need more coverage when:
- You take on additional expenses, such as a new mortgage.
- You have new dependents to provide for, such as a spouse or a new baby.
- You want life insurance protection for those dependents, if they aren’t included under your current policy.
Why Should I Get My Life Insurance through PALIG?
There are several factors to look at when choosing a life insurance company. Among the most important are the company’s history, financial strength and industry ratings. Here’s how PALIG measures up:
- History – we have been serving customers for more than 115 years. Learn more about PALIG's history and the company today.
- Financial strength – Our strong balance sheet and solid capital generation demonstrate that we’re equipped to meet our commitments.
- Financial strength ratings – PALIG's financial strength is evaluated by independent rating agencies, including AM Best and Fitch Ratings. Year after year, we receive the highest assessments from independent rating agencies.
Ready to get more personalized answers to your life insurance questions? We’re happy to connect you with one of our local advisors.
To learn more about life insurance,
This article has been prepared for informational purposes only and does not constitute personalized advice.