Question 1

What is the best type of life insurance to buy?

Accepted Answer

Whole life insurance is considered to be the best type of life insurance for many individuals, mainly because there is no variable premium involved, and you get a guaranteed rate of return on the policy&#8217;s cash value.

Question 2

What kinds of death are not covered by life insurance?

Accepted Answer

Some life insurance policies allow for the payment of benefits in the event of a suicide or murder of the policyholder. Other kinds of death that might not be covered by your life insurance policy include death due to driving recklessly, committing a crime, or due to a pre-existing medical condition that was not disclosed to the insurer during the application process.

Question 3

Can I buy life insurance on someone else?

Accepted Answer

Yes. You can buy life insurance on someone else only if you have insurable interest and the individual&#8217;s consent.

Question 4

What happens if my life insurance company goes bankrupt?

Accepted Answer

All policies are transferred to a solvent life insurance company. Depending on which state you live in, the Guaranty Association provides limited coverage to the company’s policyholders.

Question 5

Is Life Insurance Taxable?

Accepted Answer

While the payouts your beneficiary receives upon your death are not taxable, any interest you receive is taxable, and you should report it as interest received.

Question 6

Does life insurance cover drug overdose?

Accepted Answer

Most policies will not cover an overdose where the victim knowingly used illegal drugs.

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