What is Life Insurance?
Before purchasing a life insurance policy, it’s best to have a general understanding of what life insurance covers. Life insurance is designed to pay money to beneficiaries when you die.1 Beneficiaries can be one or more individuals, or even an organization.
How Life Insurance is Sold?
There are multiple ways life insurance is sold, including employer-provided life insurance, voluntary worksite life insurance, and individual life insurance. Employer-provided life insurance, also known as group life insurance, may be offered at no cost through an employer, typically as part of an overall benefits package. Additionally, voluntary worksite life insurance may be an option for the employee. Finally, individual life insurance is sold to individuals themselves.2 All of these options can be term or whole life2, and can provide a cash benefit to a beneficiary upon the death of the insured.3
Obtaining a Life Insurance Policy
Once you’ve reviewed the different types of policies available, your next step will be figuring out how to actually obtain a policy.
A life insurance policy can be bought directly from insurance companies and licensed insurance agents, or obtained from an employer plan.4
A process called underwriting helps determine whether you’ll be approved for a policy. Depending on the type of policy, you might be required to pass a medical exam and answer questions about your health.4
It’s important to note a company can refuse to sell you a policy if it considers you high risk based on your health or other reasons. To learn more about this, contact your insurance company or a licensed insurance agent.
How Long Does it Take to Obtain a Policy?
The time it takes to obtain a policy depends on the type of policy you end up getting. Because of underwriting, the time it takes for the policy to be issued can vary from person to person. Some factors that can affect it include whether you’re required to get a medical exam, answer questions, etc. To learn more about obtaining a life insurance policy, contact your insurance company or a licensed insurance information.
- content.naic.org, Life Insurance, 2020
- iii.org, Life Insurance Basics, 2019
- investopedia.com, Voluntary Life Insurance, 2018
- tdi.texas.gov, Understanding Life Insurance, 2020
Categories: Insurance, Life Insurance