4 things you should know about life insurance

If you’ve been putting off buying life insurance because you think it’s too expensive, or the process is too time-consuming, or it’s not the right time in your life, perhaps you should think again. Consider these four things.

Ask someone without life insurance why they haven’t purchased a policy, and they’ll likely cite the cost. That’s a common misperception. Premiums vary depending on several factors, including your age, health, family medical history, and occupation, as well as what type of policy you buy. The average nonsmoking 40-year-old in good health may qualify for a 20-year, $500,000 term-life policy for around $300 a year.

Many insurers now use simplified or accelerated underwriting, in which they use public data to determine your coverage eligibility. That means a medical examination may not be required to qualify. In fact, plenty of applicants can obtain a policy after a short phone interview.

But many companies still require exams for policies of more than $500,000 or for applicants older than 50. Companies typically tailor the process to best fit each applicant’s individual needs.

It’s a great time to buy life insurance. You might not think about a life insurance policy while signing escrow papers, but it’s important to update your coverage to ensure that your beneficiaries could cover the mortgage in the event that something happens to you.

In fact, you should assess your life insurance needs during any major life event. When you get married or have a baby, for example, you’ll want to update your beneficiaries and consider increasing your coverage. And when you change jobs or retire, you lose the company plan and might need to increase the coverage in your personal policy.

Whole and universal life insurance coverage are common types of permanent life insurance that allow you to earn interest. You may even be able to withdraw a certain amount of money tax-free without incurring a penalty. You can use the funds for emergencies or big expenses, like college tuition, or even to pay for your premium.

Q: Does life insurance offer a living benefit?

A: Certain life insurance policies provide benefits while you’re alive if you become disabled, are diagnosed with a chronic or terminal illness, or need end-of-life care. Some policies automatically include these benefits, but they usually cost extra.

Your AAA life insurance specialist can provide more info. Visit your local Auto Club branch, call (877) 699-3768, or go to AAA.com/life. AAA life insurance specialists do not provide legal, tax, or financial advice.