Life insurance questions, answered

Term life covers you for a fixed period — typically 10, 15, 20, or 30 years. If you die during the term, your beneficiaries receive the death benefit; if you outlive the term, coverage ends with no payout. Premiums are low because most policies never pay out. Whole life (and other permanent policies) covers you for your entire life as long as premiums are paid, builds tax-deferred cash value you can borrow against, and costs significantly more — often 5-10 times the premium of equivalent term coverage.

A common rule of thumb is 10-12 times your annual income, but the right answer depends on your specific obligations: outstanding debts (mortgage, student loans), years until your dependents are self-sufficient, future expenses like college tuition, and any income your spouse or partner would need to maintain their lifestyle. A more precise method (DIME): add up Debts + Income replacement (years × annual income) + Mortgage payoff + Education costs. Subtract existing savings and life insurance to find your gap.

No-medical-exam (also called accelerated underwriting or simplified issue) policies skip the traditional lab work and physical exam. The carrier evaluates you based on health questions, prescription records, MIB data, and motor vehicle history. Approval is faster — often days instead of weeks — but coverage amounts are typically capped lower (often under $1 million) and premiums are usually 10-30% higher than fully-underwritten equivalents. Good for healthy applicants who value speed and convenience over the lowest possible cost.

Traditional fully-underwritten policies (with medical exam) typically take 4-8 weeks from application to approval. Accelerated underwriting policies can be approved in days. Guaranteed-issue policies (no health questions, available for older applicants) can be approved instantly. The timeline depends on whether records need to be ordered from your physician, how quickly the medical exam is scheduled, and the complexity of your health history. We help applicants choose products with realistic timelines for their needs.

Often yes. Most conditions — controlled diabetes, well-managed high blood pressure, history of cancer in remission, depression, sleep apnea — are insurable, though they may move you to a higher rate class or limit your product options. Some conditions like recent heart attacks or active cancer may require waiting periods or guaranteed-issue products with smaller death benefits. We shop your case across multiple carriers because underwriting standards vary significantly — one carrier’s decline can be another’s preferred rate.

Fully underwritten policies require detailed health information, medical records, and usually an exam — they offer the highest coverage amounts and best rates for healthy applicants. Simplified issue asks health questions but skips the exam — faster approval, slightly higher premiums, modest coverage caps. Guaranteed issue accepts anyone within the age range (usually 50-85) with no health questions — premiums are highest and coverage amounts smallest, but no one is denied. Guaranteed issue policies typically have a 2-year waiting period before paying the full death benefit for non-accidental death.

Cash value is a savings component built into permanent life insurance policies (whole life, universal life, indexed universal life, variable life). A portion of each premium goes into the cash value, which grows tax-deferred. After enough time, you can borrow against the cash value, withdraw from it, or surrender the policy and receive the cash value as a payout. Growth rates vary by policy type: whole life has a guaranteed minimum, universal life grows with interest crediting rates, indexed universal life ties growth to a market index like the S&P 500 with a cap and floor.

Yes, if you have a permanent policy with cash value. Policy loans are typically tax-free, don’t require credit checks, and don’t have to be repaid on a fixed schedule — but interest accrues, and any unpaid loan balance reduces the death benefit your beneficiaries receive. Loans can be useful for short-term needs but should be planned carefully; an excessive loan can cause the policy to lapse, which can trigger income tax on the gain. Term policies have no cash value to borrow against.

Most term policies offer two options at the end of the term: convert to a permanent policy without new underwriting (if your policy includes a conversion option, which most do), or renew annually at sharply higher rates that reflect your current age. Many people simply let the policy lapse if they no longer need coverage. If you still need life insurance and are healthy, applying for a new term policy is usually cheaper than annual renewals. If your health has declined, conversion (without new medical underwriting) may be the best option.

Generally no. Life insurance death benefits paid to a named beneficiary are received income-tax-free. However, there are situations where taxation can apply: if the policy is owned by the deceased and the death benefit pushes the estate over the federal estate tax exemption (currently $13.99 million per person in 2026); if interest accrues between death and payout; or if the policy was transferred for value within 3 years of death. Most personal life insurance death benefits pass to beneficiaries with no tax due.

Final expense insurance (sometimes called burial insurance) is a small permanent life insurance policy — typically $5,000 to $35,000 — designed to cover funeral costs, medical bills, and other end-of-life expenses. It’s usually simplified-issue or guaranteed-issue, making it accessible to older applicants and those with health conditions who can’t get traditional coverage. Premiums are higher per thousand of coverage than larger policies, but the application is simple and approval is fast. Available for ages 50-85 in most states.

Indexed universal life is a permanent policy where the cash value grows based on a stock market index (like the S&P 500) — with a cap on the upside and a floor (usually 0%) on the downside. So if the market is up, your cash value grows up to the cap; if the market is down, you don’t lose principal. IULs offer flexibility in premiums and death benefit, plus the potential for tax-free income via policy loans in retirement. They’re complex products with moving parts (caps, participation rates, fees) and aren’t the right fit for everyone.

Accidental death insurance only pays if you die in a covered accident — typically a sudden, external, traumatic event. It usually excludes deaths from illness, natural causes, suicide, drug overdose, and risky activities. Premiums are very low because most insureds will never die from a covered accident. Life insurance pays for death from almost any cause (with limited exclusions, such as suicide within the first two years). Accidental death is an inexpensive supplement to real life insurance but shouldn’t replace it.

Yes. You can name primary beneficiaries (first in line) and contingent beneficiaries (next in line if all primaries predecease you). You can split the benefit by percentage or specific dollar amounts. You can name individuals, trusts, charities, or your estate. Naming your estate as beneficiary is usually not recommended because the death benefit then becomes subject to probate, creditor claims, and potential estate tax — defeating one of life insurance’s biggest advantages. Always keep beneficiary designations current, especially after marriage, divorce, birth of a child, or death of a beneficiary.