Basic Features of Life Insurance:
The Death Benefit: how much the insurance company will pay once the insured person dies
The Beneficiaries: people such as a spouse or children who receive the death benefit
Two Most Common Policies:
Term: Starting at 10 years up to 30 years, with a set price correlated with the policy length and renews yearly.
Term Coverage is for you IF:
You are looking for the affordable option
Generally suitable for families
You are considering whole life coverage in the future
Young and singleRecommended from age 25 to 45
Key Features:
Low premium
Simple
Whole Life: lasts until death, “set it and forget it” life insurance. Premiums stay the same, with guaranteed rate of return on the policy’s cash value, and a consistent death benefit
Whole Coverage is for you IF:
Have a lifelong dependent, such as a child with disabilities
Want to spend retirement savings and still leave money for expenses such as funeral costs.
You plan to leave a business or property to one child, whole life insurance could compensate other children
If your long term goal is to accumulate a savings for your children
Key Features:
One and done, lifelong coverage
Generates cash value with guaranteed growth
Consistent premiums for life
Death benefit is guaranteed
Recommended after 45
Other Policies
Guaranteed Universal Life Insurance: permanent life insurance that acts similarly to whole life but with flexible premiums.
Variable Life Insurance: permanent life insurance with flexible premiums. However, the cash value is invested in sub-accounts such as bonds and mutual funds and will fluctuate based on the market of your investments.
Final Expense: intended only for expenses such as funeral costs and burial costs. There is no cash value component and no support for beneficiaries. Recommended for those without dependents or children
Group Life Insurance: term policies that are typically offered in an employment package.
Underwriting: predicts how much you will pay based on the risks of insuring you.
Fully Underwritten: often the cheapest option. Requires a medical exam and questionnaires about your health and your family’s health.Simplified Issue and
Guaranteed: does not require an exam, but will often require a questionnaire
Guaranteed Issue: does not require an exam or a questionnaire
Mortgage Life Insurance: in the case of death, pays off your mortgage to the lender
Credit Life Insurance: in the case of death, pays off a specific loan to the lender
Accidental Death and Dismemberment: coverage in the case of accidental death such as a car crash
Joint Life Insurance: generally for two spouses
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