| |
|
|
 |
WHAT IS LIFE INSURANCE?
|
|
| |
|
|
| |
|
|
| |
Simply put, life insurance is a way for you to provide financially for your loved ones after you die. It’s a contract in which the insurer promises to provide your beneficiaries with a certain amount of money in the event of your death. Whether or not you are eligible for life insurance will depend on factors such as your health and type of employment. If you do qualify, the amount of your premiums—that is, payments for the policy— are based on factors such as your age, gender, health and occupation.
Certain types of Permanent Life Insurance policies can also build cash values on a tax-deferred basis that you can use during your lifetime, through loans and withdrawals. Are you planning to get married? Buy a house? Start a business? Send a child to college? These are wonderful (and smart) reasons to add a life insurance policy to your financial strategy. |
|
| |
|
|
| |
|
|
|
DO I NEED LIFE INSURANCE?
|
|
| |
|
|
| |
|
|
| |
Of course the answer depends on your personal circumstances. But if you’re not sure, see the list of ifs below. If you relate to one or two, the answer is probably yes.
I may need life insurance…
If I have a spouse
If I have children who depend on me
If I have an aging parent or disabled relative who depends on me
If I have another loved one I wish to provide for |
|
| |
|
|
| |
|
|
|
ARE THERE OTHER REASON FOR LIFE INSURANCE?
|
|
| |
|
|
| |
|
|
| |
Absolutely. Certain permanent policies allow you to withdraw or borrow against accumulated cash value during your lifetime. Although this feature should be used with care, since it loans or withdrawals generally decrease your death benefit, the money can help with a few other ifs in your life. For example…
If I want to build a cash reserve that can help pay for big-ticket items such as a child’s college education.
If I have business or estate planning needs that life insurance can satisfy.
If my retirement plan and other savings aren’t enough to protect my family’s standard of living in the future. |
|
| |
|
|
| |
|
|
|
WHAT TYPES OF LIFE INSURANCE POLICIES ARE THERE?
|
|
| |
|
|
| |
|
|
| |
There are two basic types of life insurance.
The first is Term Life Insurance, which covers you for a period of time—or term—that you choose, after which coverage ends.
The second is Permanent Life Insurance, which offers a few more variations, such as cash-value accumulation, and covers you for your lifetime.
Types of Permanent Life Insurance include, Whole Life Insurance, Universal Life Insurance and Variable Universal Life Insurance. |
|
| |
|
|
| |
|
|
|
HOW MUCH LIFE INSURANCE DO YOU NEED?
|
|
| |
|
|
| |
|
|
| |
If you were to die, consider what your spouse and dependents would need in order to cover day-to-day as well as larger expenses, to live comfortably and have financial stability.
In addition to protection, what am I trying to accomplish with my life insurance?
Some life insurance policies can help you pay for major expenses like college tuition and estate expenses, or provide additional income for retirement or emergencies. Remember that Term Life Insurance pays a death benefit only, while different types of Permanent Life Insurance—Whole, Universal and Variable Universal Life Insurance—can supplement your income through withdrawals or loans against a policy's cash value.
What should I consider when choosing a policy provider?
In addition to being financially secure, the life insurance company you choose should have a good claims payment history, good customer service and competitive pricing. Independent sources such as Standard and Poor's, A.M. Best, Moody's, Fitch, and Weiss rate insurance companies and their publications can be found in your local library. |
|
| |
|
|
|
