Do I need life insurance ?

Does anyone rely on your income for their financial wellbeing ? This could be a child, spouse, aging parent or even the cosigner of a student loan who would get stuck with the debt if you weren’t around to pay it off. Life insurance replaces the financial support you give to others in the event you’re no longer here to provide.

What are the types of Insurance ?

Term Life – Term life insurance is temporary insurance which you pay a premium for a fixed amount of time (e.g., 10, 15, 20, or 30 years). Term life insurance helps ensure your family isn’t impacted by your debt if you should pass away.

Universal Life – Universal life is a permanent yet flexible solution. It helps protect your loved ones and may offer the opportunity to build cash value. You could have the ability to take loans or make withdrawals from the policy’s cash value for your personal needs.

Variable Universal Life – This life insurance offers investment options for greater growth potential and the opportunity to take loans or withdrawals from it in the future. Unlike Universal that’s based on a fixed interest rate, your cash value fluctuates with the market, with the opportunity for higher return potential. This policy also has the flexibility to adjust to your changing needs.

How much Insurance do I qualify for ?

Typically, an individual can get up to 20 times his or her annual income in coverage. The total coverage amount a person will qualify for often decreases with age, as retirement draws nearer. For those who are not currently employed, it’s still possible to get $50,000 to $100,000 of coverage for items such as final expense needs. Unemployed individuals will have to provide information on the application to prove that they can afford the premiums, such as disability or retirement income information.

It’s possible to get more than 20 times your income for coverage, if you have additional assets to protect over and above your income. It is also possible for homemakers to qualify for the same amount of coverage their spouse has, even without a separate income.

How much does it cost to apply for a policy ?

There is no cost to apply for a policy. An application is required to get a firm rate quote. If a physical exam is required, the insurance company will pay for it. When you apply, you have no obligation to take out a policy. Once you’re approved for coverage, you can change the term of the policy and the coverage amount to fit your budget if the rate comes back higher than expected because of health-related issues.

What kind of payment option are available ?

Most carriers have the same rules when it comes to paying premiums on life insurance policies. The only way to make monthly payments these days is to authorize a monthly automatic draft from your checking or savings account. If you prefer not to make automatic payments, there are some other options. You can receive a bill by mail if you elect to pay quarterly, semi-annually, or annually.

Most people choose to make automatic payments for their life insurance for the same reason they do for other bills, such as car insurance: they don’t want their policy to be canceled because of non-payment.

Are life insurance death benefits taxable ?

Life insurance death benefits received by a beneficiary are not subject to income tax according to current federal income tax laws.