The need for life insurance
Q: What’s the purpose of life insurance?
The primary reason to own life insurance is so that your beneficiary(ies) can receive financial compensation — called the “death benefit” — if you pass away while you are covered under the policy. Can i get life insurance.
How much life insurance coverage you purchase is up to you. You can purchase an amount of coverage to correspond with what you’d like the death benefit to be used for — to pay for your final expenses, make up for the loss of your income so your family can cover their living expenses, finance care for a dependent with special needs, pay off debts, or pay for your kids’ college tuition.
Q: Do I need life insurance while I’m young and single?
Whether you want to purchase life insurance is your decision. If you have debt, such as student loans, you may wish to have life insurance to help pay off those debts, as well as pay your funeral costs —which average around $10,000 in the U.S.
A practical reason to purchase life insurance while you’re young is because it is usually less expensive when you are young and healthy. Life insurance will only become more expensive as you age, so it may not pay to wait.
Q: I’m married. Do we both need life insurance?
There may be good reasons for both spouses to have life insurance coverage.
If your household is being supported by two salaries, the death of one spouse may cause financial hardship for the other, adding to the emotional pain. If you have a family, this financial stress can seem even more overwhelming.
If your spouse is not employed now, they may need to start working. Chances are they will encounter new expenses as they learn to manage the loss as a single parent — such as daycare and household maintenance.
Life insurance can provide immediate stability in the short run, and make things like paying for kids’ college education possible in the long run.
Q: How much life insurance do I need?
While the amount of life insurance you need depends on many factors, chances are very good that you need more than the amount of coverage you may receive automatically through your employer — often equal to your annual salary.
If you are young and without dependents, coverage equal to one year’s salary may be enough to cover your funeral costs.
However, if you’re middle-aged, with an expensive mortgage and a family that depends on your income to maintain its lifestyle, you’ll likely need much more coverage.
You may fall somewhere in between. Our life insurance needs calculator can help you estimate the amount recommended for your situation.
Q: Can I have more than one life insurance policy?
Sure! You can have multiple policies from multiple sources.
For example, although you may automatically receive life insurance coverage from your employer, you may decide you need more coverage.
In that case, you may choose to enroll for more coverage through your employer’s plan and pay the premiums through payroll deduction. Or you can choose to purchase a policy through your bank, credit union, financial advisor or insurance agent.
Commercial vehicle insurance
In the event of your death, both policies may pay a death benefit to your beneficiaries.
The life insurance application process
Q: How do I choose a life insurance company?
If you’re enrolling for coverage at work, your employer chooses the company for you.
If you’re working with a financial advisor or insurance agent, they may sell life insurance from multiple insurance companies, or just one if they’re affiliated with a specific insurance company.
There are national organizations that rate the performance and financial strength of insurance companies. Search the websites of life insurance companies you are considering to find financial ratings from A.M. Best, Fitch Ratings, Moody’s Investor Service, and Standard & Poor’s. You can check Securian’s ratings here.
Q: What is involved in the life insurance application process?
If your employer offers life insurance, you can typically enroll as a new employee and be approved automatically, without having to go through what insurance companies call “medical underwriting” or “evidence of insurability.”
If you are applying for life insurance on your own or after your initial enrollment for benefits through your employer, the application process usually consists of the following steps
You complete an application
The insurance company may ask you to complete a health questionnaire
You may be asked to complete a physical exam
The insurance company informs you if your application for coverage is accepted or declined
The length of the process can range from two weeks to three months, depending on how much coverage you’ve chosen, your health history and how you applied for coverage.
Q: What is underwriting?
Underwriting is the process insurance companies use to determine whether they can insure an applicant, at what amount and the price of the policy.
The underwriting for coverage you enroll in at work is typically faster and less rigorous than if you are buying coverage individually from another source.
Since no two people are the same, underwriters analyze the risk factors unique to each applicant, which may include age, gender, current health, medical history, occupation, lifestyle habits and more.
If the insurance company feels you present a greater risk — for example, if you are in poor health, have a dangerous occupation or are elderly — you may pay more for life insurance than will a young, healthy individual or be declined coverage.
Q: Can I get life insurance without taking a medical exam?
Employer plans typically offer guaranteed coverage of some kind, either in the form of coverage they provide for you automatically, or coverage you can select when you’re first eligible for benefits as a new employee.
After that initial period, it is common to complete a health questionnaire or medical exam when you enroll for coverage at work.
If you’re purchasing an individual life insurance policy on your own, you may be required to have an exam before you are insured.
In both cases, an exam is usually done in your home by a nurse, technician or paramedic, who will ask some questions about your medical history, take your vital readings, and take blood and urine samples.
The insurance company may also request medical records from your physician to determine your level of risk.
The life insurance claims process
Q: What is the process to file a life insurance claim?
If you know that you are the beneficiary on the life insurance policy of someone who has passed away, you will need to submit a claim before you can receive the death benefit.
To submit a claim, contact the insured person’s life insurance company to notify them of the death. The company will provide a claim form that must be completed by the beneficiary named in the policy. The form must then be submitted with a certified death certificate.
It typically takes a few days to a few weeks to receive a check for the death benefit on a life insurance policy, once you have submitted the claim.
If you need to file a new life insurance claim with Securian — or check on an existing claim — get started here.
Q: What kinds of things might cause a life insurance claim to be denied?
Sometimes an insurance company will investigate a death before paying the death benefit. This typically does not happen often, as most life insurance companies are sensitive to and want to minimize the emotional burdens being experienced by family and loved ones.
These are some factors that may cause a claim to be denied:
The policy is no longer in force so the insured is not covered
The manner of death is outside the terms of the contract (for example, some companies will not pay out in the case of a suicide that happens within a short time after taking out the policy)
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A question of double indemnity (if applicable per the policy)
Discrepancies surrounding information provided on the application
Q: Is there a way to find out if a loved one had life insurance?
Unfortunately, there is no one organization that tracks life insurance policies, so determining whether a family member owned life insurance requires research.
Here are some steps to follow to track down whether someone close to you was covered by life insurance.
Search their personal files for a copy of a policy or receipt from a life insurance company.
Look through cancelled checks, bank records and credit card statements to see if they made premium payments through one of those accounts.
Contact their employer(s) to see if they were covered under a group policy.
If they had an insurance agent, that person may be aware of a policy. If not, contact the insurance companies that issued their homeowners, auto or other policies. It’s possible they may have life insurance through the same company.
Contact their bank or credit union and ask whether they took out a policy through that institution, or listed it as an asset on a credit application.
Contact the probate court of the state they lived in. If their estate went to probate, a life insurance policy might be listed as one of their assets.
Search their state's unclaimed property records. In some cases, insurance companies are required to pay the death benefit to the state if someone died without any known heirs.