New Mexico Life Insurance FAQ

Term life covers you for a set period, like 10, 20, or 30 years. If you die during the term, your beneficiaries get the death benefit. It is usually the most affordable way to get a large amount of coverage.

Whole life is a type of permanent insurance that lasts your whole life as long as premiums are paid, and it builds cash value over time. It costs more for the same death benefit.

A common starting point is enough coverage to replace your income for the years your family would depend on it, plus enough to pay off debts like a mortgage, and to cover future costs like college and final expenses.

Subtract savings and any coverage you already have, like a policy through work. An agent can walk through the numbers with you.

Often not. Group life through an employer is usually a small amount, sometimes one or two times your salary, and it usually ends or changes if you leave the job.

Many people keep their work coverage and add a personal policy they own, so their family stays protected no matter where they work.

Your beneficiary is the person, people, trust, or organization that receives the death benefit. Most people name a spouse, partner, or children, plus a backup (contingent) beneficiary.

Naming a minor child directly can cause delays, so many parents use a trust or a custodian instead. Review your beneficiaries after marriage, divorce, or a new child.

Not always. Many policies use a medical exam, but some insurance companies offer simplified or no-exam coverage based on health questions and records.

No-exam policies can be faster, but they may cost more or offer lower coverage amounts. An agent can help you compare both options.

Final expense insurance is a small whole life policy meant to cover funeral and burial costs, medical bills, and other end-of-life expenses so your family doesn't have to pay them.

It usually has lower coverage amounts and simpler approval, which makes it popular with older adults.

Usually sooner rather than later. Life insurance is generally less expensive when you are younger and healthier, and some health changes can make coverage harder to get.

Common times to buy are getting married, buying a home, having a child, or starting a business.

In most cases, the death benefit your beneficiaries receive is not subject to federal income tax. There are exceptions, like some situations involving estates, interest, or policy transfers.

For your specific situation, talk with a tax professional.

Yes. Many people have more than one policy, like a group policy through work and a personal term policy. Some layer term policies so coverage steps down as debts are paid off and children grow up.

When you apply, insurance companies will ask about coverage you already have.

For term life, the policy usually lapses after the grace period and coverage ends. For whole life, cash value may be used to keep the policy going for a while, or you may have options to reduce coverage or surrender the policy.

If you are struggling to pay, talk to your agent before the policy lapses.