What Is Whole Life Insurance?
Whole life insurance is protection against the loss of life for the remainder of or your "whole" life. As long as the premium payments are made, your policy stays in-force and active.
How Much Is Whole Life Insurance?
Whole life insurance is protection against the loss of life for the remainder of or your "whole" life. As long as the premium payments are made, your policy stays in-force and active.
What Does Whole Life Insurance Cover?
A whole life insurance policy covers almost anything you can think of and the payout is a lump sum payment, once it's paid out to your beneficiary they can use it to pay for anything. Here is a list of a few things you can do with a life insurance payout:
- Pay Off Your Mortgage
- Get rid of your car note
- Clear credit card debt
- Cover Kids College Expenses
- Pay Taxes
- Pay Daily Living Expenses
- Use As Income Replacement
- Long Term Investments (Here are 30+ Ways To Invest)
- Cover Child Care Expenses
- Pay final expenses of the insured
How Much Whole Life Insurance Do You Need?
At Simply Insurance we recommend that you purchase up to 30x your annual income; however; if the premiums are too expensive for that policy then you at least want a policy based on 10x your annual income in life insurance.
So if you make $50,000 / year, a policy for $500,000 would be our suggestion.
Just remember to buy life insurance that you can afford. If you are buying for final expenses, the national average for burial insurance is around $10,000 so anywhere between that and $15,000 is more than enough.
How The Whole Life Insurance Underwriting Process Works
Whole life insurance is going to last for your whole life as long as the premiums are paid. These policies also build cash value, the longer the policy is in-force, the higher the cash value can become. If you are going with a traditional whole life insurance policy then underwriting might look like this:
- Medical Exam - At no cost to you, a medical examiner will come out to your home or place of work to complete your exam.
- Medical Records Request (APS) - Some underwriters will request your Attending Physicians Statement (APS) along with your medical exam. These companies want to make sure they have a clear picture and are able to offer you the best rate possible.
- MIB Check - This is going to check to see if you have any history with past insurance companies or have applied for coverage recently.
- MVR Check - This will be used to determine if you are a reckless or crazy driver. Mainly looking for things like a DUI or DWI.
- Prescription Check - This check will be used to make sure your statements match the prescriptions you take.
All of these reports are used together to determine your insurability with a particular company. Remember that each company has their own underwriting guidelines so a "No" from one company doesn't mean an "No" for them all.
How The Approval Process For Burial Insurance Works
The approval process is much simpler for Burial Insurance or Final Expense Insurance. These products usually have 3 Approval Outcomes:
- Level / Standard - This product has several health questions and maybe a phone interview, but usually no medical records or exam and is the most affordable out of the options.
- Graded - This product has only a few health questions, is in the middle on pricing, and also has a 2 year period where the coverage amount "Grades up" to the full amount.
- Guaranteed Issue - This product has no health questions, no medical exams, no medical records and no telephone interview; however, it does have a waiting period and more expensive monthly premiums.