Not necessarily. If you have no children or dependents whom you support financially, you might not need a life insurance policy after all. Life insurance aims to provide a solution for those who seek income replacement, mortgage protection, estate planning, leaving a legacy, or burial expenses. However, if someone you love is dependent on you financially, you need life insurance.

Premium rates are typically based on factors such as age, gender, height, weight, health status (including whether or not you use tobacco), and if you participate in high-risk activities or occupations.

Permanent policies are typically the best option if you are looking for life-long protection, or an option to accumulate a tax-deferred cash value. A portion of the premium of a permanent policy is used to build up a cash value. The cash value can be used in several different ways, including allowing you to take out a loan against the cash value, or paying your premium after your policy is fully paid up.

Term insurance plans cover you for a term of one or more years, and it pays a death benefit only if you die in that term.

You have bought yourself peace of mind that your beneficiaries will receive the death benefit if you should die within the term. Term policies typically offer the lowest monthly premium and are usually the best option if you have a limited budget or a temporary need. You can typically renew term policies for one or more terms even if your health has changed, however each time you do so; the premium may be higher.

Most policies have a 31-day grace period wherein you can pay the premium with no penalty or interest. If you have a term policy and do not make the payment within this grace period, the insurance company will usually terminate the policy. If you have a permanent policy, you can authorize the insurance company to draw your premium from your policy’s cash value.

Most policies have a contestability period of two years after you buy the policy. During this time, if the insurance company finds that they issued the policy under misrepresentation or withholding of information by you, they can declare your policy void.

A life insurance beneficiary is an individual, entity, trustee, or estate named by the policy owner to collect the death benefit proceeds upon the insured’s death.

There are two types of beneficiaries:

Primary beneficiary: The first one in line to collect the death benefit upon the insured’s death.

Contingent beneficiary: Also known as a secondary beneficiary, is the second one in line to collect the benefit if the primary beneficiary is deceased.

This question has been debated for as long as life insurance has been around. For most, term life insurance will be the preferred choice because it offers the most significant benefit amount for the lowest price. Furthermore, since most expenses aren’t permanent (mortgage balance, young children), getting the most amount of coverage in the most crucial period when the family is young is a sensible option.

That said, there are a few cases for a permanent policy which can be best used for estate planning or when you buy a small final expense policy.

You probably do. Most group coverages aren’t portable, which means if you lose or quit your job, you also let go of your insurance coverage. Most importantly, group coverage doesn’t offer sufficient protection and typically offers two or three times your yearly income, which by all accounts, isn’t enough. (The recommended amount is 10 times yearly income.)

My advice is to get it through your job if it’s free or at a reasonable price and supplement it with life insurance outside your workplace.

Nice try! You probably know that smokers pay two to four times as much as non-smokers do, but this trick wouldn’t work. To get the best non-smoker rate, you must abstain from tobacco for 12 months (each company has a different underwriting guideline).

Some companies will give you a standard non-smoker rate after one year of abstinence. It’s worth mentioning that you should never lie about your smoking habits to the insurer.

Final expense life insurance refers to specific protection individuals purchase to cover charges and affairs that are associated with your such as burial, funeral service, or final medical bills.

Final expense policies are whole life with a fixed premium amount that lasts for as long as the insured lives.

A graded benefit life insurance is a method insurance carriers use to offer coverage for individuals who aren’t in the best of health and otherwise may not qualify for coverage by limiting the death amount payment should they die in the first two or three years.

Life insurance’s primary purpose is to prevent financial hardship for your loved ones. Whether it’s burial expenses or mortgage balance you worry about, a proper life insurance policy can help your beneficiaries avoid this misfortune. First, let us clarify two fundamental distinctions.

No one is entitled to a funeral (for those who say, “I don’t really care what happens when I die”), so if no one pays for your funeral service, guess what? The local government will take over and bury you in a potter’s field or cremate your body.

If, however, your loved one insists on having a proper burial and funeral service, they can pay for this themselves (which you may not want to burden them with) or use any assets you left behind to pay for it.

The person who signs the contract with the funeral home is legally obligated to pay for it. Hence, buying a policy isn’t really for you. It’s to prevent the extra headaches someone you love has to go through when they need to deal with all you left behind.