Life

Life Insurance

You are not planning to have a heart attack tomorrow, or get a cancer diagnosis, or accidentally step out in front of a bus. As with all insurance, life insurance plans are about preparing for the unexpected. Life insurance provides a way to be prepared and get peace of mind.

The main reason to buy life insurance is for financial protection for your family and dependents. If you are the sole income earner or the major provider in your family, then life insurance definitely makes sense. If you should die unexpectedly, your policy will help your loved ones pay your final expenses and potentially receive ongoing support. The amount they receive will depend upon the size of policy you buy.

Do You Need Life Insurance When You Are Young?

Most people don’t think about buying life insurance when they are young, healthy and single. However, if something should happen to you unexpectedly, a life insurance policy could pay for your student loans or other large outstanding debts, as well as your funeral expenses. These are never fun things to think about, but evaluating risks is a first step to preparedness.
 
Another good reason to consider buying life insurance at a younger age is to lock in rates. The affordability of life insurance is based largely on your age and risk factors, and life insurance for adults becomes increasingly expensive. While you are young and healthy, you will pay lower premiums. With short term insurance you can choose a lock-in term, such as 15 or 20 years at a preferred rate.
 
Many term policies can be converted into permanent policies later on, without having to re-qualify. If you develop a severe or chronic condition at any point, your life insurance is already secured.

Life Insurance Over 30

Most people begin seriously thinking about buying a life insurance policy at about the time they start a family. If you are like many people, the light bulb may come on at about the age of 30, when you realize that you are mortal, and that you have real financial responsibilities.
 
An important consideration for anyone who wants to purchase life insurance is that it will never be cheaper than it is today. It’s not too late at the age of 30, 40 or 50 or even later to buy life insurance that will protect your dependents from financial hardship or provide for you in retirement. But your costs will go up the longer you wait. If you do buy life insurance now, you can lock in a life insurance premium at a more affordable rate than it will be a few years down the road.

How Much Life Insurance Do You Need?

Choosing a life insurance plan requires a bit of math. You want to figure out how much your family needs for daily spending and major upcoming expenses in the event that you pass away too soon and cannot provide for them. Or, if you are young, single and healthy, you can look at the cost of paying off any debt you have accumulated or the cost of care for an aging parent.

Life Insurance Terminology

Here is a brief overview of the most common terms:

• Accidental death insurance:  Also known as accidental death and dismemberment insurance, or AD&D, this coverage pays you or a beneficiary a benefit if you are in an accident that results in your being killed or dismembered.
• Annuities:  An annuity is a type of insurance that either pays income after your initial investment (immediate annuity) or accumulates income (deferred annuity). Either of these types of annuities can be fixed (guaranteed) or assigned a variable rate that pays out based on the policy’s associated investments. Life insurance companies typically offer annuities to help people obtain a stable income during retirement.
• Critical Illness Insurance:  While not a life insurance policy, critical illness insurance is often available through life insurance companies. You might buy critical illness insurance (or CI) if you have a family history of heart disease or cancer in order to ensure that you have the financial resources to pay for your care if you are diagnosed with a severe illness.
• No exam life insurance:  This is life insurance coverage that some companies offer without requiring a medical exam first. Typically, this option will be more expensive because without submitting the results of a medical exam to the insurance company, you are an unknown and potentially greater risk.
• Term life insurance:  This is a life insurance policy that provides a death benefit only. Your annual premiums are locked in for a set term, such as 10 or 20 years. In the event that you pass away during this period, a death benefit is paid to your beneficiaries.
• Permanent life insurance:  This is a long-term policy, such as universal life insurance or whole life insurance, which includes an investment component and can cover retirement expenses in addition to providing a death benefit.
• Universal life insurance:  A permanent life insurance policy with a “liquid” account that accrues cash value, as well as interest, with each premium you pay. You can take out loans as needed for unexpected expenses or opportunities, such as a home purchase. You also can pay more than the scheduled premium, or take breaks from paying premiums.
• Whole life insurance:  Whole life is a permanent policy with an investment component that provides for your financial needs similarly to universal life insurance, but without the liquidity of the funds. This life insurance policy accrues a cash value and pays out at the end of the policy, if it is kept current.

Finding the Right Life Insurance for You

Should you buy term life or permanent life insurance? Do you need a broker or can you get life insurance from an agency?
 
While you can buy online life insurance, it may be difficult to know what you are getting and whether it will adequately meet your family’s needs. Buying life insurance is a very personal decision. You may want a policy that builds cash value over time, or you may simply want to purchase coverage that will provide a death benefit if you should pass away within a specific term. Depending upon the ages of your children and how long it is until they graduate from college, a 10-year, 20-year or 30-year life insurance term policy might be appropriate for you. Or, you may need life insurance to cover only your final expenses. These choices are individual, and for this reason it is smart to consult with a knowledgeable life insurance agent.

How an Independent Agent Can Help Find the Best Life Insurance?

An independent agent in the Trusted Choice network who specializes in life insurance can help you learn about the various life insurance plans and provide all of the answers to your questions. Independent agents advocate for you, not for the life insurance carrier. This means they are dedicated to helping you make the best possible decision for your needs. You will have the opportunity to review various life insurance premiums and make an informed choice.