Life Insurance 101

by Lithium Technologies ‎08-12-2015 04:51 PM - edited ‎02-25-2016 03:57 PM (12,594 Views)

LifeInsurance_Lead.jpg

Test your knowledge of personal coverage with this five-question quiz.

 

Life insurance policy benefits can assist someone with which of the following?

  1. protect home mortgage
  2. retirement savings
  3. estate planning
  4. all of these

Answer: Life insurance can assist you in a variety of ways when preparing to protect your future (answer 4).

 

Which type of life insurance is generally the least expensive, helping provide protection for a specific period of time?

  1. universal life
  2. term life
  3. whole life

Answer: Term life provides protection for a specific period of time—usually 10 to 30 years—and it is also usually the least expensive type (answer 2). Universal life and whole life can help provide coverage for your lifetime, and build a cash value to use in the future.

 

Which of the following is a provision that allows you to take an advanced payment from your policy if you’ve been diagnosed as terminally ill?

  1. lifetime spousal AAA Member benefit
  2. disability waiver of premium rider
  3. travel accident rider
  4. accelerated death benefit

Answer: While these features may all be available to customize your coverage, the accelerated death benefit feature allows a policyholder who is diagnosed with a terminal illness to access money early to help care for their needs (answer 4).

 

How frequently should you review your policy with an agent?

Answer: An annual review of your policy is suggested. Whenever you experience a life-changing event, such as a new job, purchase of a new home, marriage or childbirth, we recommend you review your policy with your agent to help ensure your coverage still fits your needs.

 

True or False: On a term life insurance policy, you can get back all your premium payments if you outlive the term period chosen.

Answer: By adding a Return of Premium rider feature at an additional cost to your term life insurance policy, you can receive a return of all your premium payments at the end of the term period as long as your premiums are paid when due and the policy is kept in force (answer: true).

 

A life insurance needs analysis is a conversation between you and an experienced AAA Life Insurance Specialist to identify the right insurance products to help you meet your current and future goals. To learn more, visit AAA.com/Life.

 

A version of this story appears in the September/October 2015 issue of AAA Living magazine.

 

Image credit/source: James Steinberg/TheISpot.com

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