Life insurance can be one of the most important insurance products you choose, as it protects your family and loved ones in the case of your death. Life insurance gives you the peace of mind that comes from knowing that your family’s financial needs will be taken care of in case you are no longer available to provide for them.
While life insurance deals with some unpleasant scenarios, it’s vital to plan for the unthinkable and ensure that your loved ones are cared for.
What is Life Insurance?
Life insurance pays out a fixed amount of cash benefits to a designated beneficiary in the event of the death of the insured.
Life insurance policies usually fall into two categories: term or whole life.
What is Term Life Insurance?
Term Insurance provides a specific death benefit amount over a specified term that you select. Term periods typically range from 5 to 30 years. If you qualify, you can obtain term life insurance in almost any amount, but typical ranges go from $25,000 up to $5 million.
Due to their defined term and payout, term life policies are often the most cost-effective life insurance policy available.
For example, a family that just purchased a home could get $250,000 of term life insurance on the main breadwinner in order to pay off the house if he/she were to pass away.
You could also convert term life insurance into a permanent /whole life policy, the other main category of life insurance.
What is Whole Life or Permanent Insurance?
Whole Life – Whole or permanent life insurance combines death benefits with investment features and have no specified term or end date. Whole Life Insurance allows you to build cash value that grows tax-free.
The investment component and the fact that it never expires also means that permanent life policies cost more than term life policies.
There are several common forms of permanent life policies:
Some other benefits of permanent life insurance include:
Does My Health Impact My Ability to Obtain Life Insurance?
Yes. Many life insurance providers require a physical examination to ensure you are in good health. But many companies do specialize in working with individuals with certain ailments and can still provide a policy with some additional stipulations.
Generally, non-smokers with good health records will pay less, while a history of certain ailments such as heart disease, diabetes, high blood pressure or lifestyle choices like smoking increase the premium amount.
Some diseases may also prevent you from securing life insurance all together, although we can usually work through most of these issues.
There are also life insurance policies which are available without health examinations, which maybe an option for those who may be concerned about their risk profile.
Does My Age Impact the Cost of Life Insurance?
Yes. In most cases, monthly premiums are lower the earlier life insurance is purchased. That said, there are a wide variety of policies and products available in today’s market, and we have been successful at finding the right policy for people across a wide range of ages.
Do I Need Life Insurance?
We recommend some form of life insurance protection to everyone, even for those who do not have clearly identified beneficiaries like a spouse or children. The following examples outline a few scenarios where life insurance is beneficial:
Selecting the Right Life Insurance Product
Like all insurance, your personal factors will determine what’s right for you. Our agents are well educated on the various available products. We can help you understand the options and select the right products to meet your objectives and ensure that you have the protection you need. Call or email us today to get started!