As a rule of thumb, when you apply for life insurance you want to be covered for 8 to 10 times your annual salary. (There may also be other considerations of what amount you want if you are in a business situation or if you are using life insurance for a specialized need such as mortgage payoff in case of untimely death). So, if you earn $50,000 a year, you want to have a death benefit of $400,000 to $500,000. This is to allow for your beneficiary to be able to pay off all your debts and still have money left over to invest into an account and use as income.
Beneficiaries need to be chosen with some care, because your choice is investigated by the underwriters when your application is turned in. Technically you can name anyone you want, but a "strange" naming such as a very distant cousin may get your policy denied due to suspicions about your motives. If you are married you should name your spouse and/or your children, though you do not have to; but once again, if you don't that fact may be viewed with suspicion, although if you can justify it to the agent and underwriters you'll get the policy. You can change your named beneficiary(s) at any time while the policy is in force.
Most life insurance policies will not pay out if you commit suicide or are murdered by a named beneficiary within the first two years of having the policy and there will be a written clause stating such in your policy. Also, if a death benefit claim is made and it turns out you as policy holder lied on your application (such as you said you don't smoke but autopsy proves you did), life insurance companies won't pay out.
When you apply for life insurance you must be prepared to answer some sensitive personal questions about financial matters and health matters. The agents are trained as objective-minded professionals and there are strict industry regulations about confidentiality.
Some people prefer applying for life insurance over the Internet. This can be a good idea if you know what you're doing, but the usual person would benefit from meeting in person with agents representing different life insurance companies or meeting with an insurance broker or financial planner to be advised on the best options.
Beneficiaries need to be chosen with some care, because your choice is investigated by the underwriters when your application is turned in. Technically you can name anyone you want, but a "strange" naming such as a very distant cousin may get your policy denied due to suspicions about your motives. If you are married you should name your spouse and/or your children, though you do not have to; but once again, if you don't that fact may be viewed with suspicion, although if you can justify it to the agent and underwriters you'll get the policy. You can change your named beneficiary(s) at any time while the policy is in force.
Most life insurance policies will not pay out if you commit suicide or are murdered by a named beneficiary within the first two years of having the policy and there will be a written clause stating such in your policy. Also, if a death benefit claim is made and it turns out you as policy holder lied on your application (such as you said you don't smoke but autopsy proves you did), life insurance companies won't pay out.
When you apply for life insurance you must be prepared to answer some sensitive personal questions about financial matters and health matters. The agents are trained as objective-minded professionals and there are strict industry regulations about confidentiality.
Some people prefer applying for life insurance over the Internet. This can be a good idea if you know what you're doing, but the usual person would benefit from meeting in person with agents representing different life insurance companies or meeting with an insurance broker or financial planner to be advised on the best options.
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