Life Insurance Options

Life Insurance Basics

Life Insurance is financial protection given to someone (beneficiary) if or when the policy holder dies. Life insurance rates are affected by age, health, and gender. These policies pay out a tax-free benefit to the beneficiary. There are primarily two types of Life Insurance which are Term Life and Whole Life.

Term Life Insurance

Term Life Insurance is coverage for a certain period of time with a continuation of premiums paid. Often these policies range from 10, 15, 20 or even 30 years. The premium charged is relatively low and the coverage is relatively high. For example, $100,000 in coverage could be as low as $50 per month. These policies expire at the end of their term. Often, life insurance companies will have a renewal option but the premiums will be higher.

Whole Life Insurance

Whole Life Insurance is permanent coverage with a continuation of premiums paid. These policies also accumulate a cash value. That means a portion of your monthly payment goes into an interest-bearing savings account. This amount will accumulate over the years and allows the policy holder to withdraw, borrow against or make monthly payments with the balance. Keep in mind that certain policies have restrictions on the cash value. Often the premium charged is a higher amount dollar for dollar as compared to Term Life Insurance.

Hybrids

Just as there are simple Life Insurance Policies, there are more complex versions too. For example, there is a type of Whole Life Insurance called Universal Life Insurance that allows the policyholder to adjust premiums and benefits without writing another policy. There is Variable Life Insurance that allows the policyholder to invest in certain investments with the portion of the cash value. Then there is a hybrid of these called Variable Universal Life Insurance whereby the investment is chosen, and coverage and premiums can be adjusted.

There are also “Riders” that can be added to policies that can create significant changes. For example, a newer rider is something called “Cash Back Option” whereby you can receive back all premiums paid on Term Life Insurance. Other Riders such as Terminal Illness allows a portion of the death benefit to be paid early with a diagnosis. There are riders for disability, accidents, waiver of payments, etc.

Life Insurance for Your Needs

There are a handful of scenarios that people are looking to cover. Keep in mind, Life Insurance is mainly covering the financial contribution if the policyholder were to die unexpectedly. Some people do buy Life Insurance solely as a means for investment. Life Insurance is not limited to a single policy and a person can hold as many policies as desired with continuation of policy premiums.

These are the most common scenarios for coverage:
-Mortgage Protection
-Final Expense (Age 50-89)
-Cover Debt left to family
-Leave money behind to help loved ones
-Financial Investment for family
-Help family members to continue with normal lifestyle

Coverage at the Workplace

Many employers cover their employees with life insurance. Usually this is a great benefit as the deducted premiums are quite low and the coverage is reasonably high. In most scenarios the coverage does not continue after employment. Also, if there is a disability, the coverage will often expire. If you have workplace coverage, take a good look on how the policy will perform in the above scenarios. We also do workplace coverage.

Are You Eligible?

As stated earlier, Life Insurance is based on age, health, and gender. The Insurance Company will do a background check and look at medical, legal, and driving records. These factors will play a part on what policy is available and for how much.

Underwriting

After all the information is submitted and the records are pulled, the next step is underwriting. Sometimes the underwriting agent needs to confirm some information via a phone call or the insurance company may require a medical test before approval.

The Rest

There are different ways to get approved. Some Life Insurance companies offer no medical test policies such as Final Expense Policies. There are policies that are Guaranteed Issue too and those types of policies may benefit those that have multiple medical illnesses.

Contact Us

Get in touch with us and share your needs. We can help you decide which policy will best fit you.