Life Insurance FAQs

Frequently Asked Questions for Life Insurance

  • Why do I need life insurance?

    There's no replacement for you and the contribution you make to your family. You want to make sure that people in your life, especially your dependents, can remain financially secure after you die.

    That's what life insurance does for you and your loved ones. It gives you peace of mind. Income replacement is the #1 reason why people buy life insurance.

    Stay-at-home moms or dads also have an important, often overlooked, economic value that should be covered by life insurance.

    Life insurance is also used to achieve specific business or estate planning goals.

    Bottom line: life insurance financially protects your family and loved ones at a time when it is needed the most.

  • What does term life insurance cover?

    The standard term life policy covers death by any cause at any time in any place, except for death by suicide within the first two policy years (one year in some states), as long as it's within the term of your policy.

    You will need to discuss heart disease, cancer, diabetes and other serious illnesses during the application process.

    Expect to also be asked about heart disease or cancer in your family and whether or not you engage in any risky hobbies or activities, as well.

    A brief face-to-face interview with a paramedic technician is usually required for coverage amounts above $250,000.

  • How do I know how much life insurance I need?

    The GEICO Insurance Agency recommends that each family income provider carry no less than ten times their annual income/worth in life insurance.

    The amount of your outstanding mortgage should also be a consideration. Any coverage for your mortgage should be in addition to the amount of insurance you calculate for your income coverage.

    It's quite common to see life insurance also referred to as mortgage protection insurance since most people equate buying life insurance with the need to pay off large debts.

  • Who should I buy life insurance from?

    You take the time to purchase a life insurance policy, so you want to feel confident that the company will be around in 20 or 30 years to handle your family's needs if the time arises.

    That's why the most important buyer's tip is to buy from a financially sound life insurance company. Though competitive pricing is important, it's more important that the company is stable, financially strong and able to fulfill the policy should you need it.

    You should pay particular attention, at time of purchase and throughout the life of the policy, to the financial stability ratings of your life insurance company. GEICO Insurance Agency, Inc. recommends that you buy only from companies rated A ("Excellent") or higher by A.M. Best Company.

  • What are the advantages of term life insurance?

    The easiest life insurance to understand (and the lowest cost to buy) is term life insurance, which is why GEICO choses to offer it through our partners.

    Term life insurance provides straightforward death benefit protection without any expensive "cash value" or investment component add-ons.

    Your term life insurance policy will offer level premiums for your choice of 10, 15, 25 or 30 years during which the premiums are guaranteed not to increase. As long as you pay your premiums on time, the company cannot cancel you. If the insured dies during the term, the death benefits are paid to the beneficiary without any complicated process or rules.

    It doesn't get any easier than a term life insurance policy, plus it's the most affordable type of life insurance.

  • Can I afford term life insurance?

    Term life insurance has become very popular with consumers in recent years.

    Most companies allow you to pay on a monthly, quarterly, semi-annual or annual basis, so whether you're a pay-all-at-once kind of person or you enjoy spreading it out each month, payment flexibility definitely makes term life insurance even easier to afford.

  • What should I look for in a term life policy?

    Most high quality term life policies sold today are guaranteed renewable, which gives you the right to continue your coverage beyond the initial rate guarantee period without a medical exam.

    This feature can become extremely important to your family should you become sick and uninsurable towards the end of your initial term life rate guarantee period.

  • How do I decide the number of years (term) to choose for my policy?

    Choosing an initial rate guarantee period is easy. Simply match the period of time you'll need coverage to the available rate guarantee period.

    For example, if your children are young or you have decades to go on your mortgage, look at 20 or 30 year term life. If your children are leaving the nest and your home is paid off or nearly paid off, perhaps 10 or 15 year term might fit the bill.

  • How often should I review my life insurance needs?

    Your life changes constantly, right? From purchasing a new home to getting married or having children to starting a business or even retiring, your life and your financial situation are constantly in flux.

    Because the financial needs of your loved ones change over time, you should take a look at your life insurance policy periodically.

    The GEICO Insurance Agency suggests you review your life insurance coverage at least once every five years or when you experience a major life event such as change of income or assets, marriage, divorce, retirement, the birth or adoption of a child, or purchase of a major item such as a house or business.

  • Who can I name as beneficiaries?

    In naming your beneficiaries, keep in mind that the life insurance company will only allow the names of those who are actually financially dependent upon you in some way.

    Adults or children that you support, or owe money to, are considered to have a financial interest in you.

    An acquaintance, roommate, friend or relative, absent of a financial relationship, will not do. You can name a charity if you have a history of giving to that charity.

  • How do I get the best rates on life insurance?

    Many people don't realize how affordable life insurance really is. With a little planning and preparation though, you can often qualify for even more competitive rates. Here are the top tips for obtaining the best life insurance rates possible.

    • Stop smoking: If you smoke or use other tobacco products, make it your priority to stop. It will improve your health, likely reduce your insurance costs, including health insurance rates.
    • Get fit: The healthier you are, the lower your rates may be. Even small changes can make a difference when it comes to reducing your health.
    • Disclose: The insurance company will do a full review of your medical and lifestyle records. Disclosure allows you the chance to explain health conditions or other situations.
    • Schedule early: Early morning physical exams may show lower blood pressure and better cholesterol levels. If you can, try to avoid scheduling physicals after a large business lunch or stressful meeting.
    • Review: Keep an eye on rates. Make it a habit to review rates every 3 to 5 years. You can also update your policy to reflect changes in your life.
  • Should I think about inflation when buying life insurance?

    If you're purchasing a term life insurance policy for a few years, inflation may not be a big concern. However, if you're looking for a long term policy for 20 or more years, or getting whole life insurance quotes, it should be a part of your calculations.

    Something to keep in mind is that inflation increases faster in some areas. This is true for things like healthcare and education. You should calculate these separate from your other living costs when planning for inflation.

    Example: Your current bills require a minimum household income of $75,000. You can calculate inflation of 3% to 5% annually for regular living expenses and 8% to 10% annually for medical and education costs.

  • Is life insurance expensive?

    Life insurance is one of the most affordable types of insurance available. Depending on your age, amount of coverage, and duration term, life insurance can cost less than $20 per month!

  • Do young people need life insurance?

    Young people are more likely to have small children, big mortgages, and little savings. This could set them up for financial disaster in the event of a loss.

  • If I'm single without children, do I need life insurance?

    Even if you aren't married, getting life insurance when you are young allows you to plan for the future and lock-in the best possible rates.

  • Do stay at home parents need life insurance?

    Childcare, transportation, schooling, and house care costs have sky-rocketed. Replacing what you contribute to the household could be a huge financial burden on the family. Calculate how much it would cost to maintain the same standard of living when purchasing family life insurance.

  • Do I need life insurance if I'm retired, fully own my house, and have retirement or Social Security?

    The cost of medical care, assisted living, and other care has increased tremendously. Your spouse or partner may not be able to care for themselves in the future, especially without your help. Life insurance can help offset the cost of assistive living, household chores, and in-home care for your spouse or other dependents.

Please note:

The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions, exclusions or any other provision expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.

If you choose to get a rate quote online, you will be taken to the website of our partner company. The website is not owned by GEICO Insurance Agency, LLC. Any information that you provide directly to the partner company on its website is subject to the privacy policy posted on that website, which you should read before proceeding. GEICO Insurance Agency, LLC assumes no responsibility for their privacy practices or your use of either website.

Life coverages are written through non-affiliated insurance companies and are secured through the GEICO Insurance Agency, LLC.