If someone you love is dependent on you financially, you need life insurance. If you have no children or dependents whom you support financially (including elderly or disabled parents/siblings), you might not need a life insurance policy. Also consider the financial situation of whomever will be responsible for paying for your funeral arrangements should you die. Keep in mind, life insurance is th
ere to provide a solution for those who seek income replacement, mortgage protection, estate planning, leaving a legacy, or burial expenses. If you are seeking security for any of these conditions, reach out to learn more about life insurance and how it can protect you and your loved ones.
2. How much does life insurance cost? It depends on your age, gender, to***co use, family medical history, and current health. Additionally, the requested face amount and policy type is a factor.
3. How can I save money when buying life insurance? Buying a term life or a combination of term and permanent insurance may help you pay a lower premium. Buying a policy early in life is also a good way to ensure a lower premium. The older you are, the higher the premiums, and the more risk you have of developing a health condition that could increase your premium even more or disqualify you from getting coverage at all. Contact me to learn more about saving on life insurance.
4. Do I need life insurance if I have it through my employer? Most group coverages aren’t portable, which means if you lose or quit your job, you also let go of your insurance coverage. Most importantly, group coverage doesn’t offer sufficient protection and typically offers two or three times your yearly income, which by all accounts, isn’t enough. (The recommended amount is 10 times yearly income.) Get it through your job if it’s free or at a reasonable price, and then supplement it with life insurance outside your workplace.
5. Can I get a better price if I buy directly from the insurer? Life insurance prices are fixed by law and are subject to the insurance carrier and the state’s department of insurance approval. As a client, working with a broker gives you many more options, because we can shop all the top companies and offer you the best one for your situation. Besides, as a broker, we don't charge a fee because we get paid by the insurance carrier.
6. How much life insurance do I need? To determine how much life insurance you need, it’s best to look at your surviving family’s immediate, ongoing, and future financial obligations, and compare that with your financial resources. Below are examples of each type of need:
Immediate: funeral costs, medical bills, taxes. Ongoing: mortgage payments, utilities, food. Future: college tuition, retirement funds. Financial resources can include your partner’s income, savings, income-producing assets, and investments. Considering all these obligations and resources, the difference between the two is how much life insurance you need.
7. What is a permanent policy? Permanent policies are typically the best option if you are looking for life-long protection, or an option to accumulate a tax-deferred cash value. A portion of the premium of a permanent policy is used to build up a cash value. The cash value can be used in several different ways, including allowing you to take out a loan against the cash value, or paying your premium after your policy is fully paid up.
8. What is a term policy? Term Insurance covers you for a term of one or more years, and it pays a death benefit only if you die in that term. However, even if you don’t die within the term, you have not wasted your money any more than when you buy car insurance but never have an accident. You have bought yourself peace of mind that your beneficiaries will receive the death benefit if you should die within the term. Term policies typically offer the lowest monthly premium and are usually the best option if you have a limited budget or a temporary need.
9. Which one is better: Term life insurance or permanent? This question has been debated for as long as life insurance been around. For most, term life insurance will be the preferred choice because it offers the most significant benefit amount for the lowest price. Furthermore, since most expenses aren’t permanent (mortgage balance, young children), getting the most amount of coverage in the most crucial period when the family is young is a sensible option. That said, there are a few cases for a permanent policy which can be best used for estate planning or when you buy a small final expense policy.
10. What is a final expense life insurance? Final expense life insurance refers to specific protection individuals purchase to cover charges and affairs that are associated with your such as burial, funeral service, or final medical bills. Final expense policies are whole life with a fixed premium amount that lasts for as long as the insured lives.
11. What is mortgage protection life insurance? Mortgage protection insurance or MPI is a type of life insurance which pays your mortgage balance in the event of your death. The beneficiary is the lending institution and not your immediate family. Additionally, the face value will diminish over time in direct proportion to your mortgage balance.
12. What are life insurance riders? Life insurance riders are add-on provisions to enhance or customize your current coverage to fit your needs. Some riders come at no additional cost and are baked into the coverage. It’s worth noting that riders are purchased with the policy and can’t be added later. Here are a few common purchased riders:
Waiver of premium
Disability income
Term conversion
Accelerated death benefit
Child’s term life
Accidental death benefits rider
Return of premium (ROP)
13. What is a death benefit? Life insurance death benefit is the amount of money the insurance company pays the designated beneficiaries upon the insured’s death, provided the policy was in force at the time of the incident.
14. What are accelerated death benefits? Some policies have a provision that allows you to collect a significant portion of the death benefit while you are still alive should you become terminally ill. The money can be used at your discretion to pay for medical expenses or even to do specific things with your family and friends while you still can. The amount you take out early will be subtracted from the death benefit payment along with interest.
15. How does the insurance company determine my premium? Premium rates are typically based on factors such as age, gender, height, weight, health status (including whether or not you use to***co), and if you participate in high-risk activities or occupations.
16. Do I need to take an exam? If you apply for a traditional policy, then yes, you will have to undertake the exam. However, many companies also offer life insurance policies (known as guaranteed issue) without the need to go through an exam.
17. Once I buy the policy, will I ever need to change my insurance coverage? If you already have a policy, it will usually have a lower premium rate than a new policy you would buy. If you’re buying a permanent policy, the cash value will also be smaller for several years. Keeping all these factors in mind, it might be worth considering a new policy if you have any significant changes in your life circumstances, such as if you:
Are recently married or divorce
Have or adopt a child (or became a grandparent)
Have children or grandchildren who are about to enter college
Provide care or financial help to a child or elderly parent
Receive an inheritance
Retire (or your spouse retires)
Start a business
Change or lose your job or salary
