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Life Insurance
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Life Insurance is the foundation of financial security for you and your family. It protects your financial resources against the uncertainties of life so you can plan for the future.
Life insurance can provide an excellent opportunity for you to meet many of your goals while still protecting the financial security of your loved ones. All life insurance policies have some things in common-you make payments, called premiums, to the insurance company. When you die, the insurance company pays a death benefit to your beneficiaries. Often, this death benefit is received income tax-free. |
For a free no obligation life insurance quote,
fill out our Life Insurance Quote Form
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Life Insurance is the foundation of financial security for you and your family. It protects your financial resources against the uncertainties of life so you can plan for the future.
For a free no obligation life insurance quote, please fill out our Life Insurance Quote Form.
Life insurance can provide an excellent opportunity for you to meet many of your goals while still protecting the financial security of your loved ones. All life insurance policies have some things in common-you make payments, called premiums, to the insurance company. When you die, the insurance company pays a death benefit to your beneficiaries. Often, this death benefit is received income tax-free.
Applying for Life Insurance
Most life insurance policies require a medical exam when you apply.
The insurance company pays for this exam. An insurance company also may review your medical records, family medical history and your credit history. There are many companies who offer life insurance with out any medical exam or blood work. Some even offer life insurance right online and your coverage is applied & bound instantly. You apply and pay for Instant Term Life insurance right from our website. This insurance is offered from reputable and highly rated carriers.
Do You Need Life Insurance Coverage?
Would your death leave anyone in a financial bind? For many of us, the answer is yes. Like many people, Joe, 30, got serious about life insurance in preparation for the birth of his first new born, locking down a $1 million policy immediately. If he should meet an untimely end, he explains, "I want to let my wife stay home with my baby and not have to uproot her life completely."
Once you become a parent, any adult who is contributing in your house hold income should have life insurance coverage that will last until your youngest kid gets through college. And in a family without a lot of money saved or put away for that difficult time, a stay-at-home parent may need a small policy, to cover child care costs that would be created by that parent's absence.
Even if you belong to the dual-income, no-kids crowd, you may need life insurance to cover large shared financial obligations such as a mortgage. For older empty-nesters, though, life insurance is often an expense ý as long as your retirement nest egg is big enough to support your surviving spouse, you may not need life insurance anymore. Now, If that nest egg is really big ý at least $1 million, enough so that your assets will generate estate taxes. It's worth staying insured, because your beneficiaries can use the proceeds, which are tax-free, to pay off any liabilities.
Term Life Insurance
- Premiums are guaranteed to be level for the specified term.
- The policy is guaranteed for its face value for a specified period of time as long premium is paid on time.
- When the insured dies, the company pays a death benefit. This money is generally free from federal income tax.
- Our expert & unbiased life insurance agent can help you determine the amount and type of insurance needed to cover your specific insurance needs. (You may also use our Life Insurance Calculatorfor your own information.)
How it works:
- Term life insurance lasts for a specified period of time, usually 1 to 30 years. The most common terms are 10 years and 20 years.
- Term life policies pay beneficiaries the face value if the insured dies during the term. For example, a 30-year term life insurance policy with a face value of $100,000 would pay $100,000 if the insured died any time during those 30 years.
- Generally, term life insurance costs less than permanent life insurance.
- At the end of the term, the insured is no longer insured, and a death benefit is not paid. Some term life insurance policies are renewable (yearly renewable or otherwise) term life insurance policies or can be converted to permanent life insurance.
Permanent Insurance
Permanent life insurance, however, can also provide a living benefit. When you pay your premium, part of it goes into a cash reserve and accumulates tax-deferred. You can generally access this cash reserve at any time, for any purpose. It can be used for things like education expenses, retirement income, and many other needs. It also remains in force during the insured's entire lifetime, provided premiums are paid as specified in the policy.
How it works:
- Permanent life insurance is often referred to as cash value life insurance. The cash value is the dollar amount the policy owner can withdraw if they choose to cash out the policy before the insured's death.
- Permanent life insurance pays a death benefit when the insured dies. Though it will not be cancelled by an insurance company due to the age or health of the insured, if the insured reaches a certain age-usually 95 or 100-the policy is considered "mature." The policy owner receives the cash value of the insurance policy and death benefits are no longer payable.
- As long as the premium is paid, the insured's coverage continues.
- The premium is applied to a death benefit and a cash savings account that can earn interest.
- Various premium payment options are available including monthly, quarterly and annually.
- The insured may sometimes borrow against the cash value portion of the policy, too. If the cash value is not paid back prior to death, the death benefit is reduced by the amount borrowed.
Living Benefits
When you hear people talking about the "living benefits" of life insurance, they are often referring to one's ability to access the cash value. Frequently the "living benefits" of the death benefit go unnoticed. Let's take a look at some:
Spend down your assets - A common concern for many people during their retirement years is conserving their assets and passing them along to their spouse or children. Owning permanent life insurance, however, allows you to have more flexibility and freedom with your spending habits. You can increase your retirement income and reduce the fear of dying without leaving behind sufficient assets simply by having a death benefit that will replace the assets that you spent.
Maximize your pension benefits - Those of us who will receive a monthly pension from our employers will have to make a very important, and often irrevocable, decision before retiring - which option will you choose for a monthly income amount. Those options determine how much your spouse would receive if you were to die. Often people choose to accept a lower monthly amount in order to continue providing a benefit to a surviving spouse. By owning a permanent life insurance policy, you may have the flexibility to choose a higher monthly retirement income because the insurance will provide needed benefits to your survivors.
How Much Coverage Do You Need?
The average insurance-owning household had $196,200 worth of life coverage in 2000 ý and if that seems like a thin lifeline in the age of the $400,000 mortgage, your instincts are right. "Most people are woefully underinsured," says Linda Sherry, editorial director of the advocacy group Consumer Action. But the solution isn't simply to buy all the insurance you can afford. Even in today's choppy market, the extra premiums you'd pay could be earning significant returns elsewhere.
To find the right amount of coverage, you must weigh your dependents' spending needs against their future income and assets. Our worksheet will help you do that. It'll remind you of costs (additional child care for a suddenly single parent, funeral charges, etc.) and sources of help (investments, Social Security benefits for survivors). But remember, this will give you only a rough estimate. Ideally, you should run the numbers every two years or so to see if your needs have changed.
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