Why do I need life insurance?
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.
How do I know how much life insurance I need?
To easily determine your life insurance needs, use our Life Insurance Calculator.
Who can I name as beneficiaries?
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.
How often should I review my life insurance needs?
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.
Is there a waiting period before the full life insurance benefit takes effect?
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.
What does simplified issue mean?
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.
What is a fully underwritten life insurance plan?
In general, if you apply for a fully underwritten life insurance plan you will be required to complete a paramedical exam and answer questions regarding your personal health history, family health history and disclose whether or not you engage in any risky hobbies or activities.
What coverage does term life provide?
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.
Will my benefit decrease as I grow older?
No. After your coverage begins, your benefit will not decrease as you grow older or if your health changes.
Will my (term) premium rate go up every year?
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.
Can my coverage be cancelled if I become ill?
Your coverage is guaranteed to stay in force for the duration specified in the policy as long as you pay your premiums.
If I have more than one life insurance policy, do they all pay if I die?
Yes. Any life insurance policy with currently paid premiums will pay full benefits (less any loans or policy indebtedness) to your beneficiary if you die.
Can I afford term life insurance?
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.
What should I look for in a term life policy?
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.
How do I decide the number of years (term) to choose for my policy?
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.
What is Whole Life insurance?
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.
What is cash value (permanent) life insurance?
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.
What is a Universal Life policy?
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.
What happens if I miss a scheduled payment for my Universal Life policy?
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.
Why purchase a Final Expense policy?
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.
Is Final Expense Life Insurance a Term or a Permanent Policy?
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.
Are there any restrictions on how the death benefit of a Final Expense policy can be used?
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.
Do the premiums ever change on a Final Expense Insurance Policy?
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.