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Life Insurance 101 Questions & Answers
What is term life insurance?
Term life insurance is a form of life insurance that provides financial protection for a set period of time or term such as 1, 10, or 20 years. If you die before the term is up, your beneficiary receives the death benefit, usually tax-free. It can be used however needed without restrictions. Term life insurance is one of the more popular and affordable ways to provide a financial safety net for loved ones. Group term life insurance, like that offered through your association, can offer key advantages.
Why do I need term life insurance?
If you have a spouse, children or other family members depending on you, term life insurance can be an easy and affordable way to make sure money is available to help them cover expenses after you're gone.
How does life insurance work?
Life insurance is designed to provide money to the people who mean the most. When applying for insurance, there is often information needed about your health and financial background. This could be collected online through data sources with your permission, or through phone calls and/or a visit with a medical professional. Once the insurance company receives and reviews your information, you receive a decision confirming if you will be offered the insurance applied for. Once accepted, as long as you remain eligible and keep payments up to date, when you die, the life insurance company pays a benefit to the person(s) you name as your beneficiary. This money usually is tax-free.
How much life insurance do I need?
Experts recommend you have 6 to 10 times your annual salary in place through life insurance and/or savings. You should have enough life insurance to cover your debt and the daily expenses for those you love.
How much does life insurance cost?
The cost of life insurance is determined by many factors. Your age, gender, and health are considered when you apply. Many Americans overestimate the cost of life insurance by as much as 5 times, so it may cost less than you think. Refer to our rate chart or online quote.
What are the advantages of buying through my association?
Group insurance from an association is portable so you can keep it no matter where you work. Plus, your group negotiates with insurance companies to include benefits which reflect your groups unique needs. On the other hand, employer-provided life insurance usually covers only part of your income. And if you leave your job, it often ends.
How do I apply for term life insurance?
You can apply online or download a printable application that you complete and return by mail.
Can I apply for term life insurance for my family?
Yes. Typically, your family can apply for coverage. If your spouse is between the ages of _____ and _____, he or she is eligible to apply. Qualifying dependent children ages _____ to ____ may also apply.
What information do I need to apply for term life insurance?
You’ll be asked to provide information about those being insured. The initial application may require your social security number, driver’s license information, and medical details such as doctor information and prescription doses. You may need to provide separately additional health and financial information.
Do I need a medical exam to apply for term life insurance?
Not always. You may be requested to answer a few health questions by phone or have a medical exam. The exam is at the insurance company's expense and scheduled at your convenience.
Could my life insurance application be denied?
Yes. Applications are reviewed for insurability based on age, health and other information you provide or give permission to obtain. In some cases, the insurance company will decide not to offer insurance. Guaranteed insurance products with limited coverage could be an option if this happens.
How long does it take for my insurance to go into effect?
Typically, you should receive a decision about your application within 5-10 days after your required materials are received. Some applications require gathering more information, such as physician's statements, than others.
Are there restrictions on how the death benefit payment can be used?
No. The money your beneficiary receives can be used however needed. It could help replace lost income, cover funeral bills, pay off a mortgage, even fund college.
Accelerated death benefit
A portion of a life insurance death benefit that can be paid to the insured person while living. The purpose is to help with costs associated with severe chronic or terminal illnesses.
Beneficiary
The person(s) or trust named to receive payment of an insurance death benefit.
Claim
Notification to the insurance company to receive payment of an insurance benefit. Typically, a form is provided requiring details needed to process the claim.
Death benefit
Money paid when an insured person dies.
Exclusion
Conditions or terms not covered by insurance. For example, suicide is an exclusion to life insurance.
Term life insurance
Life insurance that lasts for a set time period or term. At the end of the term, the insurance either ends or converts to a new term.
Group term life insurance
A type of term insurance offered through a group such as an employer or association. Employer insurance typically offers a fixed benefit set as a portion of the employee salary and often ends when employment ends. Associations offer amounts the individual can choose and can be kept across jobs.
Level term life insurance
Insurance in which payments are designed to remain the same, or level, across the term.
Premium
The cost of insurance for attained coverage that is due in periodical payments of an insured’s choosing such as monthly, quarterly, semi-annually or annually.
Underwriting
The process used to decide if and at what rate class an applicant will be offered insurance and the cost. This can include health and financial assessments.
Rate class
The categories of health and other factors of an applicant which impact insurance offered and the cost.
Disability Insurance 101 Questions & Answers
What is disability insurance?
Disability insurance replaces part of your income for a specific period of time if you're unable to work because of an illness or injury. Group disability insurance, like that offered through your association, can offer key advantages designed for the unique traits of your group.
Why do I need disability insurance?
People often think disability insurance only covers serious injuries and illnesses. However, many common injuries and illnesses can result in you being unable to work. The fact is, over 25% of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before retirement. Source: U.S. Social Security Administration, Fact Sheet, 2019
What types of disabilities are covered?
While people generally think of disabilities being caused by accidents, many disabilities are caused by illness. Plans vary in the specific types of disabilities covered, however disability insurance typically covers a variety of illnesses, as well as serious accidents and injuries which prevent you from working.
How much disability insurance can I apply for?
There is a maximum amount of disability insurance you can apply for. You are usually limited to 45-66% of your monthly income across all disability insurance you may own.
How much does disability insurance cost?
The cost of disability insurance depends on the amount you apply for, how long it will last, the length of the waiting period, as well as your age, health, and occupational factors.
What is a waiting or elimination period?
A waiting or elimination period is the length of time you have to wait before the insurance company will pay benefits. The longer the waiting period, the less expensive the insurance.
How do I apply for disability insurance?
You can apply online or download a printable application that you complete and return by mail.
Do I need a medical exam to apply for disability insurance?
Not always. You may be requested to answer a few health questions by phone or have a medical exam. The exam is at the insurance company's expense and scheduled at your convenience.
Could my disability insurance application be denied?
Yes. Applications are reviewed for insurability based on age, health and other information you provide or give permission to obtain.
Supplemental Health Insurance 101 Questions & Answers
What is supplemental health insurance?
Supplemental health insurance can help pay for specific health care expenses. It does not replace major medical health insurance. Group supplemental health insurance plans, like those offered through your association, can offer key advantages designed for the unique traits of your group.
Why should I consider buying supplemental health coverage?
Illnesses and hospitalization could leave you or your family with substantial unexpected expenses not fully covered by primary health insurance. Supplemental insurance can provide cash payments directly to you to help cover expenses you otherwise would have to pay out of pocket. This could include co-pays, services, childcare, and needed items to help you recover.
What is hospital indemnity insurance?
Hospital indemnity is supplemental health insurance that pays a fixed daily benefit for each covered day you are hospitalized or experience other qualifying medical events. Benefit amounts can increase, even double, if hospitalization is due to cancer or if the insured is admitted to intensive care. You can apply online or download a printable application that you complete and return by mail.
What is hospital and home-care recovery insurance?
Hospital and home-care recovery insurance is supplement health coverage that pays a cash benefit based on the number of covered days you are hospitalized, as well as a daily benefit to secure home care following a hospital stay. You can apply online or download a printable application that you complete and return by mail.
What is critical illness insurance?
Critical illness insurance is supplemental health coverage that pays a single, lump-sum benefit if you are diagnosed with a heart attack, stroke, cancer, or other specified critical illness. You can apply online or download a printable application that you complete and return by mail.
For more information on products for you and your family, please visit the GeoCare website at www.GeoCareBenefits.com