9 questions about life insurance you’re afraid to ask

Getting life insurance can feel like a big decision. It’s also an important strategic play to help you plan for your life and help you protect what matters most.

Before you can make your next move, you may need answers to your questions. Important questions you might be hesitant to ask.

We get it. Here’s answers to common questions on the who, why, what and when of life insurance.

Can I get life insurance with my health condition?

That depends on what the condition is, and how severe. Timely detection and effective treatment and management of many illnesses are resulting in improved life expectancies. And insurance underwriting reflects this progress. The best way to find out whether you’re insurable is to talk to an advisor to discuss it. They can then provide insight on the best next step which could be to submit your application for full underwriting.

In the event you don’t qualify for the policy you applied for, you can still buy a “guaranteed issue” policy with no health questions. Such policies are small – typically no more than $25,000 – and can help families with funeral expenses.

Can I get life insurance if I have a hazardous hobby?

Yes, but your policy may not cover you for death related to the specific hazardous hobby.

Based on the underwriting's assessment, several outcomes are possible:

• The insurer declines your application
• The insurer issues a policy but charges you a higher premium due to the increased risk
• The insurer issues a policy excluding coverage if you die while skydiving (but still covering other causes of death).

Let’s say you’re learning to skydive. To help decide, the underwriter will look at the mortality rates* for skydivers.

*(Insurers use mortality tables to determine your life expectancy, based on the known risks to your health and lifestyle.)

Am I too old to get life insurance?

Life insurance policies usually have age limits. For example, many policies can be purchased up to age 85. However, the amount of coverage you can buy –and how much it can cost you– increases with age. Term insurance policies typically have purchase-age limits that correspond with the length of the term.

For example, you may be able to buy:

• a 10-year term policy up to age 75, or
• a 30-year term only up to age 55.

Why might you want life insurance when you’re older, if you no longer have dependents or a mortgage? You might still want to buy life insurance to pay for your funeral. Or, you may buy a policy because the tax-free death benefit can help your children manage your estate expenses. You can buy permanent life insurance in your 50s, 60s or even 70s or 80s.

How can I be sure I’ll have enough life insurance when I need it?

The best way to be sure you have enough life insurance is to work with an advisor who can help you determine how much you might need. Life changes can increase the amount of coverage you might need, so choosing the right policy is important.

Suppose you took out life insurance when you were single. Or childless. Or owned a smaller home. But now you’re married, or a parent, or need a larger home. Or you’ve just landed the high-paying job of your dreams. Congratulations! But, as a result of your good fortune, you find you need more life insurance. Of course, more insurance costs more money. But you might be worried that you’ll have to pay more because you’re older now. You might be concerned about renewed questions about your health. Here’s some more good news: Worries about life insurance needn’t cloud your happiness. Some types of term insurance let you increase your coverage significantly, at specified intervals. And some new types even let you increase your coverage when you have an important life event. Like getting married. Or having a baby. Or taking on a bigger mortgage. Or even getting that dream job. Wondering how this type of life insurance could work for you? Talk to an advisor.

Will my advisor be suspicious if I want to take out a large policy on my spouse?

It’s unlikely. First of all, you can’t insure an adult in real life without their knowing about it. (So much for the stories they tell in movies.) Also, the age and income of the insured person is a factor in determining the size of a policy. This makes sense, because life insurance can be used to replace the insured person’s income for a period of time. The amount of insurance you’re applying for needs to make sense. There must be a clear need for the coverage. If your spouse doesn’t have a multi-million-dollar income but you want a multi-million-dollar policy, your advisor may wonder why.

For example, there may be a policy-size cap of 25 times the annual income of someone under 40. Suppose your 35-year-old spouse earns $80,000 per year. You could insure them for no more than $2 million. As the usual retirement age gets closer, the limit drops. Between 50 and 60, the cap could shrink to 10 times annual income, for example. So, your insurer may limit a new policy to $1.5 million on your 55-year-old spouse who earns $150,000 per year.

Do I have to list my spouse as my beneficiary?   

No, you don't have to name your spouse as a beneficiary. You can name anyone you want as your beneficiary – your spouse, children, a friend or even a charity.

What happens if I outlive my term life insurance?

Coverage stops at the end of your term policy. Term life insurance covers you for a set term (or amount of time), like 20 or 30 years. At the end of the term, the coverage may stop or automatically renew – depending on your policy. People often buy term policies because they feel they only need insurance for a limited time. That could be for the length of a mortgage, or until their children grow up.

You may be able to renew your term policy at a higher cost. Or, you may be able to convert your term insurance to permanent life insurance, under certain conditions.

Can I take out a policy on someone I’m not related to?

Yes, if the death of that person would cause you financial hardship. This is called having an "insurable interest" in the person covered by the policy. Of course, you must let them know or have their parent/guardian approve the policy if they’re a minor.

Will I get the money in time to pay for the funeral?

If your claim is straightforward, you can expect a payment as soon as 10 to 14 days after filing it. Most funeral homes have no problem with waiting for a life insurance death benefit to receive payment. It’s wise to confirm this, however, when you’re making arrangements. As the beneficiary of a life insurance policy, you can file a claim as soon as you get the proof of death form. The funeral home will usually provide several of these within two or three days, once you’ve made the arrangements.

Who can answer even more questions about life insurance?

A Sun Life advisor can answer your questions, and help you learn more about how life insurance works and what kind of coverage and amount is the best for you. Find an advisor.

Do you already know what kind of life insurance you want? Get a quote.