• What is life insurance?
• What is a beneficiary?
• What is term life insurance?
• What is the difference between term life insurance and other forms of life insurance?
• What is life insurance used for?
• How much life insurance do I need?
• Why are A.M. Best Ratings important?
• Can I find better prices elsewhere?
• Will my premium payments remain constant over time?
• Does life insurance get less expensive "per unit" if I increase my coverage amount?
• How can I reduce my life insurance premium?
• What is a Rate Class?
• What is involved in the application process?
• Can I cancel my application if I change my mind?

What is life insurance?

Life insurance is a contract that binds an insurance company to compensate a beneficiary in the event of the death of the insured person. If the insured person dies, the insurance company will pay a cash benefit to the beneficiary (typically a family member). Life insurance is typically used to protect a family against the economic hardship that could result from the death of a primary income-earner. (Note: If a family has more than one income-earner, it is often prudent to get a life insurance policy for each income-earner.)

What is a beneficiary?

A beneficiary is a person or entity named to receive a portion of the proceeds of a life insurance policy. The owner of a life insurance policy may name multiple beneficiaries, and can determine the percent of proceeds to each beneficiary (proceeds do not have to be split equally among beneficiaries). Most insurance companies permit the policyholder to change beneficiaries over time.

There are two types of beneficiaries: primary and contingent. Primary beneficiaries have the first claim to the proceeds of a life insurance policy should the insured die. The policyholder of a life insurance policy may also specify a contingent or secondary beneficiary. The contingent beneficiary has claim to a portion of the death proceeds in the event a primary beneficiary dies prior to the policyholder.

If you click the "Apply" button to begin the application process, you will be able to enter the names of up to 3 primary beneficiaries. At any time during the application process you can change your beneficiary information including adding additional primary beneficiaries or specifying secondary beneficiaries.

What is term life insurance?

Term life insurance is a specific type of life insurance, which has become very popular in recent years. Term life insurance provides protection for a specified period of time, typically 5, 10, 15, 20, 25 or 30 years (this is called the coverage term). The person to be insured selects the coverage term, and a death benefit is paid to the beneficiary if the insured dies within a specified period of time while the policy is still in force. Term life insurance works well for people who need coverage for a specific period of time; for example, when a child is born a parent may take out a 20 or 25 Year term life policy to ensure that in the event of their death, the child will be provided for through his or her college years.

What is the difference between term life insurance and other forms of life insurance?

There are two main forms of life insurance: term life insurance and permanent life insurance (also known as whole life and universal life). The main differences between these two types of life insurance are:

• Term life insurance will pay a death benefit if the policyholder dies within the term of the policy. Permanent life insurance will pay a death benefit regardless of how long you live, provided the premiums are paid. For many people, the need for life insurance protection decreases dramatically once they retire. This is because a primary reason for life insurance is to protect loved ones against income loss, and upon retirement there is often times significantly less income to protect. Thus, for many people a term life policy that extends to retirement age may be appropriate.
• Term life insurance is significantly less expensive than permanent life insurance.
• Permanent life insurance can be a used not only as an insurance policy, but also as an investment vehicle. With permanent life insurance, a portion of your premium goes to building cash value with interest. This cash value can be withdrawn before death if needed. Term life insurance cannot be used as an investment vehicle. However, the lower premiums charged to term life policyholders allow them to invest the difference in whatever manner they choose (401K, stocks, bonds, saving account, etc.). Additionally, many term life policies have conversion privileges which allow them to be converted to permanent policies under some circumstances.

These are some of the main differences between term life and permanent life insurance. Deciding which is most appropriate for you is a very individual decision. You may want to consult with a licensed life insurance agent (such as those available through our life insurance partner AAH at 877-800-7340 or financial advisor before making your decision.

What is life insurance used for?

The proceeds from a life insurance policy may be used in several ways, including:

• Income Replacement - In the event of an individual's death, life insurance proceeds can provide an income stream to ensure that the surviving family members are able to maintain their standard of living. (Note: If a family has more than one income-earner, it is often prudent to get a life insurance policy for each income-earner.)
• Funeral expenses - Life insurance proceeds can ensure that there is enough money for a proper funeral and burial.
• Debt - Credit card debt, bills, student loans, and other forms of debt can be covered by the proceeds from a life insurance policy.
• Mortgage Protection - The proceeds of a life insurance policy can pay off the balance of a mortgage or provide an income stream to pay monthly mortgage.
• Rent - In the event of insured's death, rent payments can be made from the insurance policy proceeds.
• Education - Life insurance proceeds can ensure that the current and future education costs of the insured's children are covered.
• Estate Taxes and Probate Costs - If a will or trust so instructs, life insurance proceeds can be used to pay for estate taxes and cost of probating the estate.
• Donations/Gifts - An individual can use a life insurance policy to fund a donation to a charity or leave a gift to a beneficiary.

How much life insurance do I need?

There is no exact formula to determine how much life insurance you need, although a general rule of thumb suggests an amount equal to 6 to 8 times your annual earnings. But, everyone's life insurance needs are different. For example, an individual's needs are typically greatest from the time they start their careers or a family until they reach retirement. Exactly how much life insurance you need will depend on factors such as:

• the size of your family
• the age of your children (and their education needs)
• how much you owe on your home
• the amount of other debt you have
• the amount of income that will need to be replaced (over a period of time)

These needs can be offset by savings, current life insurance, retirement funds, and other liquid assets. The difference is the amount of additional life insurance you need.

Why are A.M. Best Ratings important?

When it comes time to paying death benefits, it will be important that the insurance company you have chosen is financially stable and able to meet its obligations. There are several industry associations that rate the financial strength of insurance companies. The A.M. Best rating is one of the more widely accepted measurements of an insurance company's financial strength.

By clicking the "Details" link for a particular plan, you will be able to see not only the A.M. Best rating, but also other measurements of the insurance company's financial strength.

Can I find better prices elsewhere?

No! The premiums on our site are the same as those offered by other agents because plan premiums are filed with and regulated by the Departments of Insurance in each state. No one else can offer a lower premium for the plans on our site.

Will my premium payments remain constant over time?

To determine how long your premiums will remain constant, look at the "Rate Guarantee" period for the plans you are considering. This is the period of time that your premiums will remain constant.

For example, a 10-Year term life policy with a 5-Year rate guarantee period, might have premium payments as follows:

	Year 1:	$500
	Year 2:	$500
	Year 3:	$500
	Year 4:	$500
	Year 5:	$500
	Year 6:	$750
	Year 7:	$1000
	Year 8:	$1250
	Year 9:	$1500
	Year 10:	$1750

This type of payment structure allows for lower premiums early in the term, but the premium payments can increase significantly as the insured get older and health conditions change.

But, a 10-Year term life policy with a 10-Year rate guarantee period, might have premium payments as follows:

	Year 1:	$750
	Year 2:	$750
	Year 3:	$750
	Year 4:	$750
	Year 5:	$750
	Year 6:	$750
	Year 7:	$750
	Year 8:	$750
	Year 9:	$750
	Year 10:	$750

With this type of payment structure, premium payments remain constant over the entire term of the policy. (Note: this type of plan has become very popular in recent years because policyholders know what all their future premium payments will be, and can budget accordingly.)

Does life insurance get less expensive "per unit" if I increase my coverage amount?

It is true that buying more coverage can result in your paying less per unit. The "buying in bulk" principle applies to life insurance too. But, you should only buy what you need. Buying more than that is usually not the best use of your money. You can always buy more coverage later. (Note: insurability and premium amounts for coverage purchased in the future will be based on your age and health condition at that time.)

How can I reduce my life insurance premium?

There are a number of ways to reduce your premium.

• Pay annually. Some insurance companies charge additional fees if you want to pay on a monthly basis. If you are willing to pay on an annual or quarterly basis, you may be able to reduce your cost.
• Stop smoking. It may not be easy, but it will be worth it. Some insurance companies charge smokers nearly twice as much as non-smokers for the same amount of coverage.
• Lose weight. If you are more than 20 pounds over the recommended weight for your height, you may pay significantly more for life insurance.
• Reduce high-risk activities. Participation in high-risk activities such as sky diving, rock climbing, and other thrill sports can increase premiums.

What is a Rate Class?

A rate class is a specific risk category assigned to you by an insurance company. Insurance companies use personal medical history, family medical history, occupation, hobbies, and other factors to determine your rate class. The rate class in turn determines how much your premium will be.

Based on questions you answer, you are assigned to an appropriate rate class for each insurance company. As you continue the application and underwriting process, your rate class (and premium) could change as additional health history and personal information is gathered. If this happens, you will have the option of selecting a different insurance company, canceling your application, or continuing with the company you originally selected.

What is involved in the application process?

Here is what is involved:

1) Start the application process by clicking the "Apply" button and submitting the brief online form.

2) Your application request will be forwarded to our life insurance partner. A representative from Mrhealthinsurance.net will contact you by telephone to complete the remainder of your application and schedule a brief medical exam that can be completed at your home or office. The exam is paid for by the insurance company and typically consists of blood/urine specimens, height/weight and blood pressure readings, and medical history questions.

3) Your application will be mailed to you for your review and signatures. At the time of your medical exam, the medical examiner will collect your application and it will be forwarded to the insurance company to be underwritten (which typically takes 4-8 weeks). If your policy is approved, you will be notified and the policy will be mailed to you.

Can I cancel my application if I change my mind?

Yes. There is NO OBLIGATION to buy a plan. Once you begin the application process you have the right to cancel your application at any point prior to the start of coverage. If you decide to cancel your application prior to the start of coverage, you will have no financial obligation to us or the insurance company.

Additionally, if for any reason you are not completely satisfied once you receive your life insurance policy, you have 10 days (may be longer in some states) to return it for a full refund. Return to top of page.