There’s no replacement for you and the contribution you make to your family. You want to make sure that people in your life, especially your dependents, can remain financially secure after you die. Bottom line: Life insurance financially protects your family and loved ones at a time when it is needed the most.
To easily determine your life insurance needs, use our Life Insurance Calculator.
In naming your beneficiaries, keep in mind that the life insurance company will only allow the names of those who are actually financially dependent upon you in some way. Adults or children that you support, or owe money to, are considered to have a financial interest in you. An acquaintance, roommate, friend or relative, absent of a financial relationship, cannot be named as beneficiaries. You can also name a charity if you have a history of giving to that charity.
Because the financial needs of your loved ones change over time, you should take a look at your life insurance policy periodically. Insphere suggests you meet annually with your agent to review your current coverage and discuss any major life events such as change of income or assets, marriage, divorce, retirement, the birth or adoption of a child, or purchase of a major item such as a house or business. During that review you and your agent can determine if there needs to be a change to your life insurance coverage.
For most types of life insurance you’re covered with the full benefit from the very first day your coverage takes effect. The exception is if the coverage is issued with a graded benefit which means that partial benefits are provided when the policy is issued and full benefits are provided after the policy has been in force for a predetermined amount of time.
In general, simplified issue means that you aren’t required to have a paramedical exam or complete a lengthy health questionnaire to apply for coverage.
The standard term life policy covers death by any cause at any time in any place, except for death by suicide within the first two policy years (one year in some states), as long as your policy is in force.
No. After your coverage begins, your benefit will not decrease as you grow older or if your health changes.
Premiums for a term policy are guaranteed level for the duration of the initial term premium period, from 5 to 30 years in duration. After the initial premium period, premiums will increase annually for the duration of the coverage period.
Your coverage is guaranteed to stay in force for the duration specified in the policy as long as you pay your premiums.
Term life insurance has become very popular with consumers in recent years because premiums for new policyholders have dropped to all-time lows. Most companies allow you to pay on a monthly, quarterly, semi-annual or annual basis, so whether you’re a pay-all-at-once kind of person or you enjoy spreading it out each month, payment flexibility definitely makes term life insurance even easier to afford.
Most high quality term life policies sold today are guaranteed renewable, which gives you the right to continue your coverage beyond the initial rate guarantee period without a medical exam. This feature can become extremely important to your family should you become sick and uninsurable toward the end of your initial premium guarantee period. Also, look for a policy with a good conversion privilege and good, solid permanent policies to convert to.
Choosing an initial rate guarantee period is easy. Simply match the period of time you’ll need coverage to the available rate guarantee period. For example, if your children are young or you have decades to go on your mortgage, look at 20 or 30 year term life. If your children are leaving the nest and your home is paid off or nearly paid off, perhaps a 10 or 15 year term might fit the bill.
Whole Life insurance is intended to remain in force during the Insured’s entire lifetime, provided premiums are paid as specified in the policy. Whole Life insurance offers three guarantees, a guaranteed premium, guaranteed cash value and a guaranteed death benefit. A whole life insurance policy builds cash value on a tax-deferred basis. This cash value may be accessed (using loans) for emergencies and opportunities, or to supplement retirement income.
Permanent life insurance is designed to be in force for your entire life-time. It can be either in the form of whole life or universal life. Permanent policies usually have a cash value, which can be accessed for emergencies or opportunities.
Universal life insurance is an interest-sensitive product that combines cash accumulation and term insurance rates, providing great flexibility with premium payments. Decreasing the premium reduces the cash values available in the future and shortens the protection period or lengthens the premium-paying period. Increasing the premium increases the cash values or shortens the premium-paying period. Policy expenses and cost of insurance are deducted each month from the policy values; any unused premium is credited to the cash value account and is eligible to earn interest.
Premium payments for universal life insurance policies are flexible. If you miss a payment, the cash value of the policy is used to pay the monthly cost of insurance and administrative expenses. To maintain coverage, care needs to be taken to insure the cash value is not depleted below a level that covers the cost of insurance.
The cost of final expenses (burial, cremation, funeral service, casket) increases yearly. The proceeds from a Final Expense policy will help your family pay for these or other items. If you already have burial insurance, it might not cover the rising costs of your funeral. Final Expense benefits can also be used to pay for other expenses, such as medical bills, you may leave behind.
A final expense life insurance policy is a cash value permanent policy usually a whole life policy. The cash value builds within the policy which may give you financial flexibility in the future.
No. Beneficiaries can use the death benefit to pay for funeral costs, credit card debts, car payments, etc. This provides your loved ones with security and flexibility.
No. The premiums are guaranteed level. They will stay the same until the policy is paid up. Additionally, the death benefit will never decrease over the life of the policy.