Tim Wilhoit agency owner of Your Friend 4 Life in Nashville, Tn answers a few common questions about life insurance that consumers frequently ask. Hopefully, one of these questions can help you as well.

Why Does My Child Need Life Insurance?

I am not sure I would say that a child needs life insurance. There are two main reasons to insure a child, one is financial savings and the other is protecting insurability.

Writing a whole life or universal life policy, or cash value plan, on a child has advantages to be able to save extra money for college, a first home or even retirement. The premiums are very affordable and with the right plan can have a good guaranteed rate of return on investment.

The second reason is protect the child’s insurability. If you purchase life insurance on a child most all companies have a conversion clause which means the child can convert to higher face amounts, five, ten or greater times the original death benefit without proof of insurability. If the child had a diagnosis in later life and became uninsurable then they would have this policy at a very reasonable rate for the rest of their life.

Does Life Insurance Test For Weed?

Life insurance companies do not usually test for rag weed, chick weed or dandelions. However, they do test for THC which is the active ingredient in marijuana. I cannot speak to new underwriting stipulations in states like CO where recreational use is now legal, but in TN where it is illegal a person will have some issues.
It is tested through a paramed exam with blood and urine samples taken.

Who Should Have Whole Life Insurance?

The reason that anyone would carry a whole life policy is someone who realizes that may need life insurance for their “whole life” at one level premium. This is first and foremost. Understand that whole life insurance policies are the Swiss Army knife of life insurance because of their versatility. Their funds can be used for things such as retirement, college and critical illnesses. However, the main reason is for having coverage for your whole life at one level premium and protecting your insurability for life.

What Happens When Your Term Life Insurance Ends?

It depends on the exact type of term policy you have as to what happens when a term life policy ends. One way is the policy will just cancel and you will need to purchase another plan if you still have a need for life insurance. The second and more common term life policy will not cancel but the premiums will increase sharply, usually 8 to 10 times in order to get you to cancel the coverage and be underwritten again. This can be a costly mistake unless carefully watched. Having a good life insurance broker helps keep up with these and many other aspects of your life insurance needs.

How Much Would $500K Life Insurance Cost?

It really depends on several factors. Your age, build, state of residence, occupation, policy type,  health and lifestyle all play a factor in determining premium.
For example a healthy 21 year old male for $500,000 10 year level term is $14.51 per month. Where as a 51 year old in average health would cost $99.73 per month.
I recommend an experienced independent life insurance broker to professional shop the market to find you the best product at the best price for your unique situation.

Please be sure and read all of the blogs in the series life insurance FAQs from April 2014 to find your question or contact Tim Wilhoit at Your Friend 4 Life.

“You can hope for a miracle in your life, or you can realize that your life is the miracle. “ ~Robert Brault

Image by Stuart Miles images at www.freedigitalphotos.net

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Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger and team leader with over 27 years of experience in sales and marketing in the insurance and beverage industries.