ABOUT LIFE INSURANCE

About Life Insurance

It’s Not Just For Burial Costs.  In a nutshell, Life Insurance is intended to make things easier for your loved ones left behind.  Your loved ones (beneficiaries) can use the life insurance money to cover funeral costs, mortgage costs, rent, college tuition and any other expenses they may have.

Do you need Life Insurance?

If you answer no to the following questions, you may need life insurance.

-Can my family afford $10,000 or more for burial costs, or about one third to one half of that for a cremation. Burial costs can vary depending on where you live.

-Can my family handle living expenses without my income?

-If I change jobs, can I keep the life insurance policy that has been provided to me by my employer?

 

Guaranteed Term Life Insurance

Most people buy Guaranteed Term Life Insurance because they want to make certain they have life insurance protection while they are paying on a mortgage or while they are raising children.   They plan to keep the policy during that time only.

Guaranteed Term Life Insurance means that during a certain number of pre-determined years, your rate will not change.  If you have a 10-year term policy, your cost will stay the same for 10 years. If you have a 15-year term policy, your cost will stay the same for 15 years. If you have a 30-year term policy, your cost will stay the same for 30 years.

When the term ends, that is when an increase in the cost will occur.  The rate will, most likely, increase tremendously when the term ends.

Never cancel your existing life insurance policy until you have been approved for a new life insurance policy.

You Cannot Borrow From a Term Life Insurance Policy.

A free exam is often required to qualify for a guaranteed term life insurance policy. The insurance company will send someone to your home or office to perform the exam.

If there is no exam involved to purchase the policy, the policy may be more expensive than a policy that requires an exam.

 

Whole Life Insurance

People who buy Whole Life Insurance/Final Expense policies are looking to have coverage until age 100. They usually just want a small policy to cover burial costs.

These types of policies usually build a cash value that can borrowed from. However, borrowing from the policy can reduce the value of the death benefit.  That means the beneficiary could receive less money.

 

Cancellations

Never cancel an insurance policy until you know that you have been approved for a new policy. Make certain that the approval has been confirmed and that your new policy is in effect.

 

Premium

The word Premium means price. The premium must be paid to keep your coverage in place. The premium is pre-determined by you to be paid monthly, quarterly or annually. If you need to change the payment mode, you would notify the insurance company.

Before you apply for life insurance, you can get an idea of what your premium would be by getting a free life insurance quote online.   Keep in mind that the life insurance quotes online are just estimates.  The true price is determined when your application goes through underwriting.

 

Beneficiary

The Beneficiary is the one who receives the insurance money when a death occurs. You can have more than one beneficiary named in your policy. You get to specify the dollar amount or percentage each beneficiary would receive. You can always change the beneficiaries and the amounts designated.

 

Free Look Period

You usually have a “30-day free look period” to determine if you are comfortable with what you see in the policy.

When you receive your policy, read it right away.   If there are things you do not understand, contact your Agent.  It is okay to ask questions and do research.

To check an insurance company’s rating, etc., visit the Department of Insurance website for your State. For example, if you live in California, you can search online for  “Department of Insurance California”.

 

Ask Questions About The Insurance

Make certain you know how your policy works. Here are some questions you would want to ask:

-Am I covered during the first 2 years of the policy?

-Will my rates go up?

-Can my policy be terminated?

-What is the grace period for my premium payments?

-Are there any exclusions?

Ask your Insurance Agent any question that comes to mind.

 

IMPORTANT:  This article was written to provide you with some basic information about life insurance. Talk to your Life Insurance Agent to get more information and clarity.  

 

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