Life Insurance – Frequently Asked Questions (FAQs)

General

1. What is life insurance?
   Life insurance provides a payout (called a death benefit) to your chosen beneficiaries if you pass away. It helps protect loved ones financially by covering expenses such as income replacement, debts, funeral costs, or future goals like education.

2. Why is life insurance included in the benefits marketplace?
   Life insurance gives employees affordable access to protection that helps safeguard their families. Offering it as part of a workplace marketplace often means lower costs and simplified enrollment.

3. Who needs life insurance?
   Anyone who has family members or dependents who rely on their income (such as a spouse, partner, or children) should consider life insurance. It’s also valuable for covering final expenses or leaving a legacy.

Coverage

1. What types of life insurance are available?
   The marketplace may include:

• Term Life Insurance: Coverage for a set period (e.g., 10, 20, or 30 years), usually the most affordable.

• Permanent Life Insurance (Whole or Universal): Coverage that lasts for life and may include a cash value component.

1. How much coverage should I choose?
   It depends on your needs—common guidelines suggest 5–10 times your annual income. Advisors or online tools can help you calculate a more precise amount.

2. Can I keep coverage if I leave my job?
   Yes, many policies are portable, meaning you can keep the coverage even if you change jobs.

3. What if I already have life insurance?
   You can still compare marketplace options. Many employees use supplemental policies to add more coverage beyond what they already have.

Costs & Enrollment

1. How much does life insurance cost?
   It depends on age, health, coverage amount, and policy type. Group and marketplace rates are often lower than buying individually.

2. Can I pay through payroll deductions?
   Yes, most policies allow premiums to be deducted directly from your paycheck for convenience.

3. Is a medical exam required?
   Some policies require a basic health screening, while others (especially group term coverage) may not require medical underwriting.

Claims & Benefits

1. How do beneficiaries receive the life insurance benefit?
   In the event of a claim, the insurance company pays your chosen beneficiaries directly, usually as a lump sum.

2. How do I update my beneficiaries?
   You can update your beneficiaries anytime by logging into the portal or contacting the insurance provider.

3. Is the death benefit taxable?
   In most cases, life insurance death benefits are paid to beneficiaries tax-free.