Life Insurance FAQs


Of all the insurance types, life insurance can be one of the most difficult to understand. With confusing terms like “convertible” and “surrender cost index” embedded in all that fine print, it’s no wonder most of us would rather just avoid the topic all together.

But regardless how we feel, pushing our way through the confusion to find definitive answers just makes sense.

Why? Because someday when we’re gone, our loved ones will have to go on. And in the midst of their loss, we want that transition to go as smoothly as possible.

Life Insurance FAQs
Life Insurance FAQs

If you, like others, have questions about life insurance, InsureMe would like to help. Here we’ve gathered the answers to some of the most commonly asked questions on the subject. Just take some time to read them over, get informed and find the answers you deserve.

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> What Is Term Life Insurance?

>How to Find the Right Agent

 When you’re finished, we’ll be standing by to help you find the right coverage.

FAQs

What exactly is life insurance?


 Life insurance is just a money related asset for your friends and family in case of your death. You enter into a contract with a life insurance company and your insurer promises to provide your beneficiary/ies a certain amount of money upon your death. In exchange, you agree to make periodic payments, called premiums, to cover that expense.

What is a beneficiary?


This is the individual or people you assign to receive the returns of your policy when you die. You’ll be asked to choose a beneficiary when you take out your policy, but you may change beneficiaries at any time upon request with your insurance company.

How can I know if I need life insurance?


The appropriate response relies completely upon your own and money related conditions. Though there are no hard-and-fast rules on this, you should probably consider buying life insurance if you:

 Are married
Have dependent children
Support an elderly parent or relative
Need to provide for other loved ones
Own your own business
Don’t have enough savings to cover your final expenses
Are confident your retirement and savings won’t be enough to take care of your family in an inflated economy
What kind of life insurance is available? How can I choose the one that’s best for me?

There are four fundamental kinds of life insurance to look over. Which one you should buy depends on your purpose for doing so: to leave your family money or to build savings to use while you’re still living.

Your choices include:

Term Life—The least expensive and simplest form of life insurance. Does not build cash value, and usually provides payment in a lump sum. Stays in effect for a fixed period of time, usually a set number of years. Premiums are lowest when you’re young and increase as you get older.

Whole Life—More expensive in the beginning to cover increasing costs as you age; however, premiums remain fixed during the life of the policy. Builds cash value on a tax-deferred basis, but withdrawals from this value decrease death benefits. In effect as long as you live, unless you cancel your policy.

Universal Life—Feature adjustable benefits and flexible premiums. Payments accumulate and earn interest, which may cover occasional premiums if you find yourself financially stretched. Accumulates cash value you may withdraw or borrow against at any time. Rates are subject to change, but will never fall below the minimum rate guaranteed in your policy.

Variable Life—Tie your life insurance policy to financial market performance. You decide how to invest your earnings, giving you opportunity to accumulate cash value more rapidly, albeit at additional risk. You may borrow against or withdraw cash value at any time.


When should I buy life insurance?


Since life insurance premiums tend to increase as you age, we highly recommend you buy a policy when you’re young and healthy. However, if you decide to put it off until later, you might want to consider putting your money into other types of investments. Then, with some financial self-discipline, the monies can accumulate and be used to purchase a life insurance policy later on.

 How can I or my family use it?


Life insurance can be used as a savings mechanism to provide your family needed finances when you die. However, depending on the type of policy you purchase, it can also be used to:

Help you pay for big-ticket items, such as your children’s college education or a down payment on a new home
Pay estate taxes or funeral expenses
I’m single. Do I need life insurance?

Marital status is just one of the factors used to determine whether or not you need life insurance. Many others come into play, too. If you’re single, you might want to ask yourself these questions to help make that decision:

Do I have any dependents?


Do I have a mortgage or other loans that will fall to a cosigner? Am I at risk for any serious medical conditions? If I died today, would I leave enough to cover my funeral expenses? If you can answer “yes” to any of these questions, buying life insurance might be a good idea—single or not.

How much should I buy?


Again, there’s no hard-and-fast rule; but experts usually recommend an amount 15 to 20 times your annual income as a good rule-of-thumb. It’s a good idea to talk to your insurance agent or a financial advisor for advice on this before purchasing your policy. 

Will I have to take a medical exam to get life insurance?


 Though some insurers require medical exams, most don’t if you’re under 40 and buying less than $100,000 in coverage. However, the older you are, the more likely you’ll have to undergo a physical and basic blood and urine tests. This also depends, in part, on your health history and your insurer’s underwriting guidelines.

I’d like to insure my parents and children, as well as myself. Is that possible?

Though you may hold life insurance on anyone in whom you have an “insurable interest” (meaning they support you or you rely on them for financial support), it’s generally better to wait until your child reaches adulthood to start thinking about taking life insurance out on them. Since replacing lost income is the main purpose of life insurance (and children usually do not earn income), life insurance is not usually needed for children. However, if your parents contribute to your financial well-being, you may add them to your policy in the form of a rider or purchase a separate policy to cover them alone.

I already have life insurance. Should I trade or replace my policy?


 Though not something to be taken lightly, you may want to consider buying a new policy or adjusting your benefits as you encounter life changes, such as:

Marriage or divorce
A birth
A new home purchase
A home refinance
A change of health
Caring for elderly parents or other family members
Early retirement
A career promotion
Receiving an inheritance
Before you trade in that old policy and buy a new one, ask your insurance agent or financial advisor what is the best alternative for your specific situation.

What is “cash surrender value”? 


 This is the amount of money you get back from your insurer if you decide to give up a policy. To figure this sum, take your policy’s current cash value and subtract any surrender charges, monthly contract charges and outstanding loans that may apply. Then add back any interest accrued. The result is what you can expect in cash surrender value.

Life insurance seems expensive. Is there anything I can do to cut down on costs? 

Of course! Besides following general guidelines like buying when you’re young and buying only what you really need, we recommend you:

Shop around, comparing prices and coverage. You’d be amazed how much prices can vary!

Buy a little more. Find out the rate per $1,000 of coverage, which often drops once you pass a certain level. Sometimes you’ll actually pay less for a little more, especially as you approach larger coverage amounts.
Look for a helpful insurance company that offers competitive rates for otherwise price-elevating health conditions like heart disease, diabetes or cancer. It could make a huge difference in your insurance premiums if you ever have to face any of these maladies.

Live a healthy life. Quit smoking, start exercising and lose weight. Your insurance rates will drop—and you’ll live longer.

Pay premiums up-front, rather than in monthly installments. You’ll avoid hidden fees and pay less in the long run.

Buy a guaranteed renewable policy (if you buy term insurance). That way, you won’t have to shop for a new policy with higher premiums when you’re older.

Now that you’ve got the scoop on life insurance, why not shop your rates. A non-biased, third party, InsureMe will connect you with agents on our network who will compete for your business, so you can choose the policy and price that’s right for you. Don’t leave the future to chance. Prepare now with the right life insurance.

Life Insurance FAQs

How to Find the Right Agent
How to Find the Right Agent


How to Find the Right Agent 

Finally, in order to complete the process to compare life insurance policies you must take the time and truly make sure you set yourself with an agent who will work best for you. The following are some ways that you can follow to find the best agent. Do not blow this part of the process of, because the last thing you want to have happen is for you to be set up with a poor agent. The process to compare life insurance policies is not complete until every step is finished and to your liking. Take some time out to make sure that you get the agent part of the proceedings correct. You do not want to complain about this part later on. 

>Life Insurance Policy

>What Is Term Life Insurance?

Research/Qualifications 

Make sure you have some sort of a list on which life insurance agents are available to you. You then need to do your research. This is how you compare agents in the process to compare life insurance policies. Know how they handle their business and what they like to do when dealing with each individual customer. Individual is the key word, because they need to treat you separate from how they treat others. Then you need to see how they are qualified. What are they qualified in and how did they manage to get this qualification? They need to be legit.

Meet With Them 

Then you need to make sure you set up some meeting with them. Face to face time can really tell you a lot about the motives of an agent. Let them know that you want to compare life insurance policies and ask them what they can do for you. They must seem interested in helping you. If they are only interested in your money then this might be a clear sign that it is time for you to move on. Make sure that you do meet with your agent because this meeting is so important.

Take Suggestions 

You must pick a life insurance agent that you feel comfortable with. It is alright if you take suggestions from other people who have gone through this before, but in the end it must be your decision. If your friends or family have concerns about an agent then listen to them. This is a large decision and you must get it correct. Do not assume that every agent is the same, because they are not. The agent you pick must be willing to go to bat for you.

How to Find the Right Agent

Hey everyone this is Bhimsen from Bm infoweb, and today we're gonna go over the most simple kind of life insurance. And the one that most financial advisors will tell you you should choose, and that is term life insurance.

What Is Term Life Insurance?
What Is Term Life Insurance?

What you're gonna learn in this post is the following, we're gonna talk about the death benefit, the reason you have a term life insurance, what the word term means, what the face value of your term life policy is and finally the beneficiary.

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>How to Find the Right Agent

Let's start with death benefit.

The entire purpose of a term life policy is the death benefit. If you pass away while the policy is in place, the insurance company will pay an amount of money to the person or entity that you designate as your beneficiary. So, some money is going to be put into the hands of the people you left behind or the entities that you left behind when you passed away. The word term is a very specific part of the term life policy. It is simply the period of time that the price of the policy is locked in. So the price cannot change during the term that you have chosen, so let's take an example here. A 20 year, which is super common, a 20 year term policy priced at $23.43 I just made that number up, per month, would stay $23.43 for 20 years. So the insurance company could not change the price on you no matter what happens with your health or anything like that for the 20 years that the policy is in place.

Something interesting that most people don't know, is that after that 20 years, the policy does not just end if you're still alive it will continue, but the price will increase dramatically most of the time you don't wanna continue with the policy after the term ends, because the price is prohibitive.

Let's talk about the face value, this is the other part of your term life policy. The face value is the amount of money that will be paid out as the death benefit to your beneficiary. So it's the amount of money you choose that will be paid by the life insurance company to your beneficiary. So an example, a common example is a $250,000 face value would pay $250,000 as the death benefit if you were to pass away while the policy is in place. So you have the term, the period of time that the price won't change, and the face value, which is how much will actually be paid out in the case of your passing. The third element here is your beneficiary, I've mentioned it before in the video, and this is simply the person, people, business, or non-profit organization that receives the death benefit, so this is who you choose to get the money if you were to pass away.

The most common example is a spouse, so a husband or a wife that you are married to and you have a family together or whatever, and you wanna know that if you were to pass away they could take care of, you know, the family, maybe pay off the mortgage, cover any money that you were bringing in for a period of time to get resettled because of your loss. So that is the most common beneficiary, but there are certainly other examples. Some of them include an estate or trust, so if you set up a will or a trust, which I suggest everyone does, then you may just direct your life insurance policy to that estate and then the directive of the estate would be, would figure out where that money went. You could send it specifically to your children, sometimes people do this, but I definitely recommend that you have a trust that makes it clear, you know, if you had a $250,000 face value, and you had an eight year old and you were to pass away, suddenly that eight year old is responsible for $250,000 without any restrictions, that can create a lot of problems, and so most financial advisors, including myself, would say, you know, create a trust before you create your child as the beneficiary. You could create a parent, often times kids that are in college that have student loans would make a parent the beneficiary of a small life insurance policy, so if they were to pass away that student loan debt wouldn't become a burden on their parents. And you could also choose your favorite charity, certainly there are people who purchase a life insurance policy, and if they were to pass away, those dollars would go directly to the charity of their choice, so the beneficiary, the person or entity that receives the face value or the death benefit of your life insurance policy.

Finally a rookie mistake, that folks make, and this is so important, is not telling family members how to find your policy. When you purchase a term life policy, you need to make sure and tell your family members where that policy is, how to contact your insurance agent in the case that you pass away so that they can access the dollars available to them because you purchased a term life policy.

Hundreds of thousands of dollars in life insurance are left unclaimed because the people who were beneficiaries did not have access to information to get to the policy, so purchasing a term life policy is super important, but as important as purchasing the policy is making sure that other people know how to access that policy, if you pass away.

If people don't know how to access that policy, then it's essentially worthless, because there's nothing that can be done after your passing. So that's it, what we learned here, we learned death benefit, the whole purpose that you have a life insurance policy is to pay out an amount of money to your beneficiary. Term is an amount of time, a period of time that the price of your policy cannot change, no matter what happens with your health or anything like that, the face value is the amount of money that the policy will pay out as the death benefit if you were to pass away, and finally your beneficiary is who gets the money if you pass away.

So that's it, I hope you enjoyed this life insurance, term life insurance post, there's other post if you'd like to check them out, they include our New Home Buyers Guide, if you're thinking about buying a new home, this post really isn't about insurance, it goes through the process from deciding that you wanna buy a house to the closing and your mortgage payment, really lines it out really really well, you should definitely check that post out, personal umbrellas, if you are interested in liability coverage, additional liability coverage above and beyond, usually your home and auto policies, Finally, as always the last step in this post is please, if you enjoyed this post, please subscribe to our blog so that you can get our newest post right there in your inbox and in spaces like that, we would super appreciate it, and then more than anything, if your really learned from this post please do share it, I always say good information is only great if it's shared with others, go to your favorite social media space, tell folks that you found this interesting very short, quick, succinct, to the point post about term life insurance, and they should check it out too.

Well that's it, hope you enjoyed our term life article, definitely go out and check out your local independent insurance agency ask them about term life insurance and they'll get you setup, and if you don't have somebody, feel free to call Shine Insurance agency, we would be more than happy to help you out. Have a wonderful day.

What Is Term Life Insurance?


Life Insurance Policy
Life Insurance Policy

Life Insurance Policy Information


Life Insurance Policy. When trying to choose your Life Insurance, each individual will need something a bit different. Whether it is a joint plan for family members, supplemental plans, individual coverage, or any other types you might need, if you compare what is out there before you buy, you are going to end up with what you need for less. Depending on whether you already have other insurance policies, whether you need supplements, and what your budgets are, each individual or joint couple will end up going with something a bit different when they are trying to choose the very best coverage for their needs, and when they are trying to fit in a policy that is going to fall within the set budget they have set out for the choices they are going to go with when trying to decide on the ideal levels of coverage.

>How to Find the Right Agent

>What Is Term Life Insurance?

Whether you need full or supplemental, or whether you are just trying to find the cheapest policy to give your family members something to have once you are gone, there are many options to consider when you are trying to decide on the right levels of coverage, and the right insurer for the policy you ultimately end up going with. If there are any unclaimed policies or questions you have, any information you need about what is covered and what is not, or any information about the policy in general, and what each insurer has to offer, you are going to find these answers when you are comparing your quotes online before you do buy. So, instead of going with the cheapest, or not asking questions, before you choose your policy it is best to get as much information as possible, to ensure you go with the right plan, levels of coverage, and of course the price that can fit in to your budget, when the time comes for you to make the purchase decision when you are ready to choose the coverage of choice.

When you are considering what policy and insurer to go with, you do have to consider what you are getting for the policy which you are going to buy. So, if you are going for full life coverage, you have to make sure the rates you are being quoted are in line with the type of coverage you are actually paying for. The only way to be sure of this is to take the time to do the side by side comparison before you buy, and to see what each insurer is offering you, and what their prices are on the policy. This will in turn allow you to find the ones that are cheapest, offer the highest levels of coverage for less, and give you the ideal levels of coverage for any insurance needs you may have, when you want to take care of your family, even though you are no longer around, and your life policy finally kicks in to effect. Check the INSURANCE INFORMATION INSTITUTE:

In addition to the choice and levels of coverage, when you compare online you also have the ability to compare the insurer you want to go with, versus other big name insurance providers, to ensure you go with the right one when the time comes for you to make the purchase. So, you will see what you are getting for the quoted price, what other insurers are offering for the same or lower prices, and this will in turn help you in deciding on what to go with, which insurer to choose, and of course how much coverage you are going to be able to buy for your set budget, when you are trying to find the very best coverage for the lowest prices.

In comparing you find what you need, and you can rule out what you do not need. So, before you finally decide on the insurer and the coverage of choice, you do have to know what is out there, how much is available to you, and what rates you will be paying for those policies.

Life Insurance Policy