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| What happens if I can't/don't make the required premiums? |
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You have a 30- or 31-day grace period and you won't be charged additional interest. But if you don't pay within the grace period, your policy will lapse. Therefore your policy will be declared canceled. However, with a universal life policy, you can usually draw from the cash value to continue your premium payments. This will lower the cash value of the policy, though. |
| What if my policy lapses? |
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If a policy lapses, most companies allow you a grace period of 10 days to pay your premium and continue the policy. If you have enough cash value built up in your policy, most companies will use part of the cash values to pay the premium due. If you have a term policy and don't pay within the grace period, your policy will lapse and simply end. |
| What do they look for in the medical exams for life insurance? |
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For individual life purchases, you will be classified based on height, weight, nicotine use, and other health factors. Your health status will determine what rate class category you fit in, so even if you have some health problems, you could be covered. There is no public list of factors available; however, your agent should explain what criterion determines the class into which you fall. |
| Can I buy a policy on someone else? |
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Yes, but only if you have an "insurable interest" in that person. This usually means a relative, a domestic partner or live-in companion, or a business partner. There are products like first-to-die that allow you to insure the life of another. |
| What is First to die? |
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First-to-die permanent life insurance policies pay cash benefits regardless of which spouse dies first. Covering both spouses with one policy can be cheaper than buying two policies. |
| Can I buy a policy on someone else without them knowing about it? |
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No, you cannot take out an insurance policy on someone without their knowledge. |
| Can I name anyone I want as my beneficiary? |
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While most people choose only their spouse, it is possible to name more than one person as a beneficiary - but only if those persons have an "insurable interest" in your policy. For example, if you have a $100,000 individual life insurance policy on your own life, you could name your spouse and four children to share in the policy equally at $20,000 each. |
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