5 Questions to Ask a Life Insurance Agent

iQuanti: Reaching out to a life insurance agent can be intimidating. There are a wide selection of policy options available, and choosing the right one is a serious decision to make for you and your family. But finding the right policy doesn't have to be a challenge if you know the right questions to ask. 

Before you sit down with a life insurance professional, here are five questions you should be prepared to ask.  

What type of life insurance policy best fits my financial and life situation?  

There are many different types of life insurance policies available. But there's no one better to parse through the noise and make a solid recommendation than a life insurance agent. Based on your age, family situation, health, and financial goals, an agent may recommend a term or permanent life insurance policy.  

Term life insurance policies are often best for those looking to provide financial protection for a particular purpose or timeframe. For example, a parent with young children may look to a 20- or 30-year term policy to cover income replacement or education expenses if they pass away unexpectedly before the kids are grown.  

Permanent life insurance, which includes whole and universal life, may be a better option for people looking for lifelong coverage. These policies include a death benefit payout in addition to a savings component that can accrue cash value over time.  

How much life insurance should I get?  

A life insurance agent should be able to help you calculate how much life insurance you'll need. They may ask about how much debt you have and how much you're contributing to the family's income.  

An agent will likely also want to know about your financial goals and intent for the policy. For example, if you want to use life insurance to leave a legacy, you'll likely need a larger policy than if you want one that only covers burial expenses.  

How much does a life insurance policy cost?

A life insurance agent can help you understand what kind of monthly or yearly premiums you'll need to pay for various policies. Generally, term life insurance policies tend to be less expensive than permanent life. That's because some of the money paid into a permanent life insurance policy goes toward accruing cash value that can be tapped later in life.  

Can I adjust my life insurance policy in the future?  

It's important to understand if you can change your policy if life or health circumstances change down the line. For example, if you have a child and want to increase coverage, what does that process look like? Will you be able to add a coverage rider to your existing policy, or would you need a new policy entirely? Understanding this process upfront means you can comfortably plan for changes later. 

Are there any policy exclusions? 

A life insurance policy exclusion is a circumstance in which beneficiaries would not receive the full death benefit payout. And since there isn't a standard exclusion list for all life insurance policies, it's critical to ask an agent this question. 

Exclusions may include dangerous activities, private aviation, illegal activities, and more. It's critical to identify any exclusions before you purchase the policy so you can plan accordingly if the exclusions are something you regularly take part in. 

The bottom line 

Working with a life insurance agent is one of the best ways to ensure you find the right policy at the best price. Before you meet with an agent, be sure to gather any questions, like those outlined above, and require the life insurance agent to answer them fully before you apply for a policy. Doing so means you'll be certain you have the right policy and are clear on how it works.