10-word answers (or less) to your life insurance questions

If you're thinking about buying life insurance, it helps to know some basics. Here are fast answers to common life insurance questions.

Q: What is life insurance?

A: It's insurance that pays someone after you die.

Q: Who gets the payout?

A: The person(s) you name as beneficiary on the policy.

Q: Do I need life insurance?

A: Yes, if your death would hurt someone financially.

Q: When should I buy it?

A: Usually when you have a spouse, a mortgage or kids.

Q: How do I figure out how much life insurance I need?

A: Add up present and future financial obligations and subtract assets.

Q: What's an example of the cost for a term life policy for $1 million for 20 years?

A: For a healthy woman age 30, about $350 a year.

Q: Can I buy life insurance on an adult family member?

A: Yes, with that person's consent.

Q: What causes of death are covered on a life insurance policy?

A: All causes, except suicide in (typically) the first two years.

Q: What is term life insurance?

A: A temporary policy that covers a specific time period.

Q: How long does a term life policy last?

A: You choose: 10, 20 and 30 years are common options.

Q: If I have term life insurance, what happens to the money I've paid if I'm still alive at the end of the term?

A: The insurance company keeps it (unless your policy refunds it).

Q: How would I get coverage that refunds my premiums if I don't die?

A: You pay extra for return-of-premium term life insurance.

Q: What's good about term life insurance?

A: It provides simple, relatively inexpensive coverage for a specific period.

Q: What is permanent life insurance?

A: A policy, with cash value, that lasts your entire life.

Q: What's life insurance "cash value"?

A: It's like a savings account within permanent life insurance.

Q: What is whole life insurance?

A: It's the simplest form of permanent life insurance.

Q: What's good about permanent life insurance?

A: It provides coverage no matter when you die.

Q: What's the downside of permanent life insurance?

A: It's expensive and many people don't need permanent coverage.

Q: What if I buy term life and decide later I need whole life?

A: Many term life policies are convertible to permanent coverage.

Q: What can you do with life insurance cash value?

A: Withdraw or borrow money, or surrender the policy for cash.

Q: Can I take money out of a term life insurance policy?

A: No, term life has no cash value.

Q: How do I get a good deal on a life insurance policy?

A: Compare life insurance quotes from several insurers.

Q: Do I have to take a life insurance medical exam when I apply?

A: With many companies, yes, if you want the lowest rates.

Q: What affects life insurance rates?

A: Your age, gender, health, smoking and coverage choices.

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This article was provided to The Associated Press by the personal finance website NerdWallet . Email staff writer Barbara Marquand: bmarquand@nerdwallet.com . Twitter: @barbaramarquand.