Frequently Asked Questions

Here at, we get a lot of questions every year. We love answering questions from clients.

To help you out, we’ve compiled a list of the questions we get most often.

If your question isn’t on this list, go ahead and send us a message or give us a call.

Q. How to cancel a rider on life insurance?

The rider on a life insurance policy is purchased separately from the policy and it will provide additional benefits, typically at an additional premium cost. In order to cancel the rider on a life insurance policy, the policy owner typically only has to notify the insurance company that he or she no longer wishes to have this additional coverage on the policy and to remove the rider from the policy.

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Q. Do all no medical exam life insurance companies have a 2-year waiting period?

While life insurance policies that do not require medical exams may cost more in terms of premium payment, these types of policies do exist. In most cases, all an applicant is required to do in order to qualify is answer several medical related questions to begin the application process.

With these policies, there are actually two different types of waiting periods – and it is important to understand which type of waiting period exists on the policy that is being applied for. These waiting periods include the following:

  • Guaranteed Issued Life Insurance Policies – These types of life insurance policies, also often referred to as graded benefit life insurance policies are typically provided to applicants who would not qualify for fully underwritten life insurance coverage, such as a senior adult looking for life insurance and has severe health issues. In nearly all cases for these plans, no benefits will be paid out if the insured passes away within the first two years of the coverage being issued. In this instance, however, the policy’s premiums will be repaid, oftentimes even with interest.
  • Suicide and Contestability Waiting Period with Simplified Life Insurance Policies – Life insurance policies also have two year waiting periods whereby information that is on the application may be further investigated. In addition, during that two-year time frame, the insurer may also investigate the cause of death of the insured if there is a claim that is filed by the beneficiary, and the claim may be contested by the insurance company during this two year time period. In addition, the life insurer also has the right to deny a death claim if the insured commits suicide during the first two years in which the life insurance policy is in force.

Q. How much interest do I pay to take a loan from a variable life insurance policy?

Just like other types of permanent life insurance policies, you can take a loan from the cash value of a variable life insurance policy. Depending on the issuing insurance company, you could take a loan of up to 90 percent of the cash value that is in the policy.

Because the loan will reduce the amount of available cash value in the policy, however, it will also reduce the amount of death benefit. While taking a loan is not considered to be a taxable event, you will be charged interest on the amount that you borrow. This interest rate may be either fixed or fluctuating. Typically, the insurance company will charge interest on loans at a rate that is a few percentage points higher than the return you receive in the policy’s fixed account.

Q. Are life insurance benefits taxable to adult children?

Overall, the face amount of a life insurance death benefit is not subject to federal income taxes by the recipient. This is true regardless of whether the recipient is an adult child of the insured or anyone else. However, these benefits could be subject to estate tax or inheritance tax, depending upon where the recipient lives, as well as on the size of the decedent’s estate.

Q. Is the amount of an unpaid loan from a whole life insurance policy deducted from the death benefit?

If you have an outstanding loan on your whole life insurance policy when you die, the death benefit that is paid out to your beneficiary (or beneficiaries) will be reduced by the unpaid amount of that loan, along with any accumulated interest.

Q. Is a credit report for health insurance required in Texas?

While it is allowable for insurers in the state of Texas to review one’s credit report prior to providing an insurance quote, a credit report for health insurance is not required. Insurers can consider credit information for making decisions regarding whether or not to insure someone, as well as what premium rates to charge. An insurance company cannot, however, refuse to sell an individual an insurance policy based solely on his or her credit.

The only state that actually prohibits insurance companies from using your credit score is California. All other states make it optional for insurance companies to check your credit – although many do take advantage of doing so prior to offering a policy, or even a premium quote.

Q. What states let insurance companies check my credit?

In the U.S., insurers in all but one state may check an individual’s credit information. The only state that actually prohibits insurance companies from using your credit score is California. All other states make it optional for insurance companies to check your credit – although many do take advantage of doing so when considering an applicant for coverage in order to determine whether or not they are an acceptable risk.

Q. I am 62 male and I need term insurance 200k or 100k in 10 years. I have non-Hodgkin lymphoma. Any possibility to get coverage?

Even with the health condition of non-Hodgkin lymphoma, there is a possibility of obtaining life insurance coverage. It is likely, however, that coverage will be considered “rated,” meaning that the premium charged will be higher than that for a comparable amount of coverage for an insured who is in good health. There are also other options out there such as no medical exam life insurance policies, though these will come with higher premium rates.

When shopping for a life insurance policy for yourself or life insurance for your elderly parent, it may be best to work with an agent or insurance company that specializes in working with high-risk cases. This way, they will be more familiar with the additional paperwork and underwriting requirements that will likely be needed in this situation.


Susan Wright, CLU, ChFC, RHU, REBC, ADPA, CITRMS, CIPA has been in the insurance and financial field for over 27 years. Even with years of experience, she continues to create new resources for others. Everything from books to training material.

Susan received her MBA from St. Louis University and her BA from Michigan State University.

She has worked in several areas but excels in writing material for both finances and insurance. Her goal is to give professionals credibility and assist in streamlining the sales process.

She has written countless articles for a variety of websites.

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