I’m young and in good health, married with no children. Why do I need life insurance?

It’s a fact of life that bad things (accidents and terminal illness) can happen. Buying life insurance is simply being prepared for the worst-case scenario. Even if you have no children doesn’t mean you have no debts. You don’t want to saddle your surviving spouse with those, along with the loss of your income and your funeral expenses. It just makes good fiscal sense to have life insurance.

Is there a good formula to follow to determine how much life insurance I need?

A number of experts suggest using this calculation: Combine your short-term needs and long-term needs, then subtract your available resources. The remainder is the amount of life insurance you should buy.

Why do empty-nesters need life insurance?

These are just a few of the reasons: If your children are in college and/or not completely financially independent, life insurance can help fill the gap; it can also cover the Social Security “blackout period,” the time between when the youngest child leaves high school until the surviving spouse applies for benefits based on the deceased spouse’s record (minimum eligibility age is 60); and life insurance can help a surviving spouse meet financial commitments that were based on two incomes.

I’ve never smoked in my life and am in peak physical condition. Will that help me in terms of the cost of my premium?

Absolutely. Smokers have to pay more for life insurance because they are a greater risk. The same thing applies to your overall health. Being the right weight, you are less likely to have high blood pressure or high cholesterol, other factors that drive up premiums.

If I am a smoker but I check off that I’m not, would the insurance company find out?

Don’t even think about lying. Complete physical exams are a routine part of buying life insurance. In order to determine whether you're a tobacco user, virtually every life insurance company gives you a test that measures the amount of cotidine -- the major byproduct of the body's absorption of nicotine -- in your urine or saliva.

What is a beneficiary?

A beneficiary is the person or entity you designate to receive your death benefit. Policies generally have a primary beneficiary and contingent beneficiary. Choosing beneficiaries, and keeping those choices up to date, is an important part of owning life insurance.

What is AD&D insurance?

AD&D (Accidental Death and Dismemberment), also called “double indemnity,” provides a lump sum payment to your beneficiaries if you die as the direct result of an accident or lose a portion of your body because of an accident. If you have life insurance and AD&D, and you die in an accident, both benefits are paid to your beneficiaries. If you or any dependents have AD&D and lose a limb or certain vital functions as the result of an accident, then you will be the beneficiary of the claim.

Is there any grace period?

Most insurers have at least a 30-day grace period to make your payment without your policy being subject to cancellation. The grace period is designed to prevent the life insurance company from forcing you to provide evidence of insurability again.