Important Facts

Life FAQs

The questions and answers in this article are designed to help you with some of the basic questions asked by many people when trying to understand life insurance.

Frequently Asked Questions about Life Insurance

When it comes to life insurance, there are many questions. Here are answers to some we hear most often.

How much is life insurance?
Likely less than you think. A recent industry study shows consumers believe life insurance costs nearly 3 times the actual price.* To get a fast, free quote, visit our quote engine.

*Source: LIMRA, Facts about Life 2013

I’m considering term insurance. What kind do you have?
We don’t sell term insurance. However, we do offer a product that provides you affordable protection with a guaranteed fixed premium and coverage level for a specified period of time, plus your premiums won’t suddenly increase after your fixed coverage period ends. It’s called Protective Custom Choice ULSM.
What’s the difference between a universal life policy and a variable universal life policy?

A universal life policy offers a cash value account where the cash value, if any, grows at an interest rate determined by the insurer. A variable universal life policy offers a cash value account that’s invested in the market through any of over 50 investment options from some of the world’s most respected fund companies.

What is a cash value account?
A cash value account is one of the advantages of many universal life policies. A portion of your premiums go into a cash value account that can be accessed while you’re alive. If you cancel your policy, you’ll get back the money currently in the account, less any surrender charges and applicable taxes. You can also borrow from it, generally at rates lower than you would find in the marketplace.
How does life insurance work?
When you apply for life insurance, the insurance company assesses your potential risk of dying and sets the premium accordingly. You pay the premium to the insurance company, and if you die while the policy is in force, the insurance company pays your heirs a death benefit.
How much life insurance do I need?

It depends on your situation. Your agent can help you determine how much money your beneficiaries might need. Things to consider are:

  • Any immediate expenses, such as hospital bills, funeral costs and estate taxes
  • Ongoing and future expenses like a mortgage, household expenses, food, tuition and healthcare
  • Additional expenses that might arise from you not being there, i.e. childcare costs and household maintenance
  • The amount of your current assets, including checking and saving accounts, investments and any other life insurance you may have
I already have life insurance with my employer. Is that enough?
For most people, no. First, employer-based policies often don’t provide enough coverage to replace your income for very long. Second, employer-based policies typically end soon after you leave the job. This means if you quit your job or get laid off or fired, your family could find themselves without coverage when they need it.
Will my family pay taxes on my death benefit?
In most cases, the death benefit goes to your beneficiaries tax-free.
What happens to my policy if my life insurance company goes bankrupt?
Any insurance company selling life insurance belongs to a state-mandated organization called a guaranty association. So if the life insurance company goes bankrupt, the guaranty association will still likely offer you some coverage. The rules and amount of coverage varies by state. In the end, checking your potential insurance company’s financial strength rating before you buy is important. View Protective Life’s ratings here.
What can I expect from the medical exam?
These routine exams can usually be done in 25 minutes or less. They include height, weight and blood pressure checks, urine and blood samples and a request for medical records. Protective Life covers the cost of your exam.
Can I get life insurance without a medical exam?
Yes, but expect to pay more. Also, without a medical exam, you may not be able to get as much coverage as you might need.
If I have a medical condition, will that stop me from getting life insurance?
Not necessarily. It depends on the medical condition, the insurance company, the policy and other factors. Some medical conditions could simply mean paying a higher premium.
I don't have any dependents. Do I still need life insurance?
Even without kids or a spouse, you may have other family members to protect from things like unpaid debts or your funeral costs. Many single people also want to provide for aging parents who might be relying on their children as they get older.
Do I need life insurance for my business?

It can make sense if you’re a partner in a business. A buy-sell agreement can be helpful if you or your partner should die. The policy allows the remaining partner(s) to buy out the deceased partner’s interests at a pre-negotiated price. Another way life insurance can help is key person insurance. Key person insurance provides the owner(s) money to help replace the loss of a key person.

Why should I get life insurance for kids?
Simply put, to protect their financial future. By getting life insurance for your child when they’re young, they can benefit from exceptionally low rates that won’t increase as they get older. Even if your child develops a condition later, they’re still covered.
What’s an annuity?
An annuity is a contract issued by an insurance company that allows you to pay either a one-time premium or a series of premiums, and accumulates those funds with interest. You can either withdraw the accumulated balance in a lump sum, or elect to receive a regular stream of payments over time.

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Questions and Answers on Life Insurance

The questions and answers on this page are designed to help you with some of the basic questions asked by many people. We understand that your life and your needs differ from others. That’s why we’ve developed an entire learning center to help you get answers to everything from the differences in types of life insurance, to the process of buying life insurance. And our library doesn’t stop there. In this section, you’ll find educational topics on a wide array of financial services – many of which we don’t even sell – because at Protective, we want to tear down the barriers that keep you from having a prosperous tomorrow and enjoying financial peace of mind today.

Still have questions?

We can discuss your questions and help get you the answers that apply to your personal situation. We can even help you find a licensed Protective Life agent or personalized life insurance quote. Just call 1-844-733-5433, Monday through Friday, 8 a.m. to 10 p.m. EST and Saturday 10 a.m. to 2 p.m. EST, or get your quote online now.