“Do I Really Need Life Insurance?”

 

This is a question I get all the time…

The short answer is yes.

Why?

Because life insurance isn’t about you…it’s about the other people in your life.  People like your spouse, your kids…maybe even other close friends or family.  What would they do if something happened to you?

How would their financial future (and present) be affected?

In short, you want life insurance for the people in your life, so they can continue to lifestyle they’ve been living. Living in the same home, the children going the same schools and leaving them with the same security as if you were still there to provide for them.  Things to consider when deciding on the amount of coverage are:

TO REPLACE LOST INCOME:  Your family would need to maintain their standard of living after the death of a wage earner.  Providing money for your surviving family members is important.  Life insurance is the most cost effective way to do that.

TO PAY OFF A MORTGAGE OR OTHER PERSONAL & BUSINESS LOANS: So your family need not be concerned with a place to live if you’re not around.

TO PAY FOR YOUR CHILDREN’S EDUCATION:  Educating children can be expensive and often requires a long-term strategy.  Many people plan to contribute funds each year until they have enough money saved to pay all or some of their children’s education costs.  Unfortunately if something unexpectedly happens to you, there may not be enough time to set aside adequate funds for education.  Life insurance can help by creating a lump-sum of cash that you can count on to help pay part or all of your children’s education costs..

TO PAY FINAL EXPENSES: This includes but is not limited to funeral costs, taxes, and any outstanding debts left for your family to pay.

Now with all of that said, not all life insurance is created equally.  Meaning some coverage is better than others, which is why we spend time educating and talking with clients to find out what the best coverage is based on their needs, wants and budgets.

Types of Insurance


Term Insurance
– Protection during limited number of years, expiring without value if the insured survives the stated period, which may be one or more years but usually is ten to thirty years, because such periods usually cover the needs for temporary protection.  Term insurance is typically less expensive than permanent insurance.

Term Insurance with Return of Premium: Returns premium (amount paid) into insurance should you outlive the term of the policy.

Whole Life Insurance – Life insurance that is kept in force for a person’s whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. Most Whole Life policies are guaranteed as long as the scheduled premiums are maintained. The variable in a Whole life Policy is the dividend which could vary depending on how well the insurance is doing. If the company is doing well and the policies are not experiencing a higher mortality than projected, premiums are paid back to the policy holder in the form of dividends. Policyholders can use the cash from dividends in many ways. The three main uses are: it can be used to lower or vanish premiums, it can be used to purchase more insurance or it can be used to pay for term insurance.

Universal Life – A flexible premium life insurance policy under which the policy owner may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates which may change from time to time.

 

Carriers Represented

Health and Life Strategies LLC will shop all major Life Insurance Carriers to find the right match for your need. Among others, some of the Life Insurance Companies we represent are:

Genworth Life Co

Protective

Banner

American General

Ameritas

Illinois Mutual

John Hancock

American National

Transamerica

AFLAC

 

Definition of Terms


Accelerated Benefits Rider
– A life insurance rider that allows for the early payment of some portion of the policy’s face amount should the insured suffer from a terminal illness or injury

Accidental Death and Dismemberment  – Insurance providing payment if the insured’s death results from an accident or if the insured accidentally severs a limb above the wrist or ankle joints or totally and irreversibly loses his or her eyesight.

Accidental Death Benefit Rider – A life insurance policy rider providing for payment of an additional benefit related to the face amount of the base policy when death occurs by accidental means.

Annuity – It is a contract sold by a life insurance company that provides fixed or variable payments to an annuitant either immediately or at a future date usually to supplement retirement income.

Application (APP) – A form on which the prospective insured states facts requested by the insurance company and on the basis of which (together with any information from medical examiners, attending physicians, hospitals, investigations, and the agent) the insurance company decides whether or not to accept the risk, modify the coverage offered, or decline the risk. An application without premium money is a request for an offer. With premium money, it is an offer itself, unless the insurance company declines to issue as applied for.

Beneficiary – Person to whom the proceeds of a life policy are payable when the insured dies. The various types of beneficiaries are: primary beneficiaries (those first entitled to proceeds); secondary beneficiaries (those entitled to proceeds if no primary beneficiary is living when the insured dies); and tertiary beneficiaries (those entitled to proceeds if no primary or secondary beneficiaries are alive when the insured dies).

Buy-Sell Agreement – An agreement in which one party agrees to purchase a second party’s financial interest in a business following the second party’s death and the second party agrees to direct their estate to sell that interest to the purchasing party.

Contingent Beneficiary – Person or persons named to receive proceeds in case the original beneficiary is not alive. Also referred to as secondary or tertiary beneficiary

Death Benefit – The amount of money paid to the beneficiary when the insured person dies.

Disability Income Rider – Adds an additional monthly benefit in the event of the insured becoming disabled or forgive the premium if the policyholder becomes disabled.

Electronic Funds Transfer (EFT) Method – An automatic premium payment technique whereby the policy owner authorizes their bank to withdraw funds from their account to pay each renewal premium.

Face Amount Initial Premium – The first premium that is paid for an insurance policy and that is part of the consideration the policy owner gives for the policy Lapse

Lapse – Termination of a policy upon the policy owner’s failure to pay the premium within the grace period.

Level Term Insurance – Term coverage on which the face value and premiums remain unchanged from the date the policy comes into force to the date the policy expires.

Long Term Care Benefits – A special rider or policy offered by some companies will pay long term or catastrophic health care benefits as a supplemental benefit. These are called living benefit or care riders. Depending upon the policy, benefits may be for nursing home care and/or at home health care.

Para-Med (Paramedical) – A physician, nurse, or para-med appointed by the medical director of a life insurance company to examine Policy

– The printed document issued to the policyholder by the company stating the terms of the insurance contract.

Policy Holder  -The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation.

Policy Term – The specified period of coverage provided by a term insurance policy.applicants

Renewable Term/Annual Renewable Term – Term insurance that may be renewed for another term without evidence of insurability. Level term usually turns into renewable term with increasing premiums after the level premium period.

Rider – Strictly speaking, a rider adds something to a policy. However, the term is used loosely to refer to any supplemental agreement attached to and made a part of the policy, whether the policy’s conditions are expanded and additional coverages added, or a coverage or condition is waived.

Risk – The chance of injury, damage, or loss. Smoker Ratings

– Insurers will give a lower premium rate to buyers who do not smoke or use tobacco. If you smoked in the past, most carriers will consider you a non-smoker if you have not smoked for one year prior to applying for coverage. Consumers should be aware that nicotine can be detected in a variety of routine screenings tests that are now commonly required by most insurance companies.

Standard Risk – Person who, according to a company’s underwriting standards, is entitled to insurance protection without extra rating or special restrictions.

Sub-Standard Risk – Person who is considered an under-average or impaired insurance risk because of physical condition, family or personal history of disease, occupation, residence in unhealthy climate or dangerous habits.

Suicide Clause – Most life insurance policies provide that if the insured commits suicide within a specified period, usually two years, after the issue date, the company’s liability will be limited to a return of premiums paid.

Surrender Charge – Expense charges sometimes imposed when a policy owner surrenders a universal life policy.

Surrender Value – The amount given to policyholder upon surrender of the policy before the maturity date of the policy.

Term Insurance – Protection during limited number of years; expiring without value if the insured survives the stated period, which may be one or more years but usually is five to twenty years, because such periods usually cover the needs for temporary protection.

Universal Life – A flexible premium life insurance policy under which the policy owner may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates which may change from time to time.

Variable Life – Life insurance under which the benefits relate to the value of assets behind the contract at the time the benefit is paid. The assets fluctuate according to the investment experience of funds managed by the life insurance company. Premium payments may be fixed as to timing and amount (scheduled premium variable life) or subject to change by the policy holder (flexible premium variable life).

Waiver of Premium – Rider or provision included in most life insurance policies exempting the insured from paying premiums after he or she has been disabled for a specified period of time, usually six months.

Insurance – Protection during limited number of years; expiring without value if the insured survives the stated period, which may be one or more years but usually is five to twenty years, because such periods usually cover the needs for temporary protection.

Whole Life Insurance – Life insurance that is kept in force for a person’s whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. Most Whole Life policies are guaranteed as long as the scheduled premiums are maintained. The variable in a Whole life Policy is the dividend which could vary depending on how well the insurance is doing. If the company is doing well and the policies are not experiencing a higher mortality than projected, premiums are paid back to the policy holder in the form of dividends. Policyholders can use the cash from dividends in many ways. The three main uses are: it can be used to lower or vanish premiums, it can be used to purchase more insurance or it can be used to pay for term insurance.