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What is Life Insurance?

Life Insurance provides protection for individuals to assist their family in case of an untimely death of the primary income earner.

There are many reasons to have life insurance; it may ensure that your family or business can help pay unpaid debts you may have at the time of your death, it may even protect your family from your loss of income, and help pay for funeral or burial arrangements.

The general rule with life insurance is that the younger and healthier you are, the less you will pay.

Life Insurance Policies are either simplified issue or fully underwritten.

Simplified issue policies only require that you answer questions about your health when completing the insurance application. These policies may cost more since the insurance company has less proof about your health.

Fully underwritten policies require that you take a medical exam and complete lab work. You usually get a lower premium with these policies if your results show good health.

While age is typically the most important factor in calculating your premium rate, there are other factors that may be included such as:

  • Gender—females typically get lower rates than males because of their longer life expectancy

  • Answers to health questions on the policy application

  • Results from medical exam and lab work (If applicable)

  • Family medical history

  • Marital status

  • Location

  • Lifestyle—smoker or nonsmoker, alcohol consumption, risky hobbies like skydiving, or scuba diving.

 

To determine how much coverage you may need, you should consider:

  •  The immediate financial needs your family would have upon your death—funeral expenses, rent, mortgage, medical bills, etc.

  • The future financial expenses for your family—estimate the amount of money it would take to sustain your family for a set number of years. For instance, how much it would cost to support your kids until they’re adults or your spouse until he or she has access to retirement funds. 

By breaking it down into two categories you may find it easier to calculate your insurance needs.

Since the amount of coverage, you need depends on factors like your age, marital status, number of dependents, and living expenses; you may want to keep in mind a few of the items listed below when estimating how much life insurance coverage you need:

·         The amount of income or type of lifestyle you want to provide for your spouse and/or dependents

·         Amount of debt you have—mortgage, car loans, student loans, etc.

·         Other income you receive from things like rental properties

·         Money you have in assets—savings, mutual funds, stocks, or retirement accounts

 Life Insurance can offer financial protection and coverage can provide you needed cash in the event of an unforeseen event and may help you provide funds to:
 
  • Pay off a mortgage
  • Pay for final expenses
  • Pay for education and childcare cost
  • Pay off outstanding debts
  • Provide lifetime income to a spouse or child
  • Ensure Business “Key Man” Protection
  • Fund Business Buy-Out Arrangements

Things to consider…

There are many things to consider when it comes to getting a life insurance policy that can help protect your family’s future financial needs.

You will need to know the basics and we are available to help make it easier for you to understand how life insurance works, the types of coverage available, why you need it, and how to go about choosing a plan that’s right for you.

It is important to think of life insurance as offering peace of mind for your loved ones.

Ready to Buy Life Insurance
  • Determine your needs: calculate how much debt you have, your monthly living expenses, and your final expenses. Include any future expenses, such as college tuition. Figure out how long you need replacement income and how much income it would take for your survivors to pay for immediate and future expenses.
  • Choose a company with a strong financial rating: companies with the highest ratings offer more guarantee that they will have the finances to pay your claim. You can get financial strength ratings from rating agencies like A.M. Best Company.
  • Make an appointment and get a quote from an insurance broker: after you narrow down your search to a specific company, speak with a licensed agent to go over more details about your needs, compare rates, policy features, and benefits to make sure you’re getting the best deal.
  • Make sure you can afford the premium: double-check how much income you have coming in and how much expenses you have going out to make sure the rate you’re getting is affordable.
  • Read your policy: after you’ve been issued a policy, make sure you read all the fine print. If you don’t like your policy, state laws generally mandate that you have a certain number of days to cancel your policy and receive a refund of any premiums you paid. This varies by state but usually it is within 10 to 30 days after the policy issue date.
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