Life Insurance Basics

 

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Questions to Ask:

  • How much Life insurance do I need?
  • What kind of Life insurance do I need?
  • How much does Life insurance cost?

 

                 Life insurance provides money typically to beneficiaries after a loved-one who has life insurance dies. Coverage can be purchased separately through an insurance agent. Other than protecting your family, life insurance can help leave an inheritance, pay off debts and expenses, and offer peace of mind while offering financial security.


Terms and Concepts

Life Insurance Can Help:

  • Replace your income with non-taxable death benefit 
  • Reduce the financial burden on your family of having to continue without you 
  • Put the kids through school 
  • Pay the mortgage, car note, and other debts you leave behind 
  • Pay your funeral expenses 
  • Pay your estate taxes

Types of Life Insurance:

  • Term Life: Generally less expensive than other life insurance products and is designated for a certain time period or to a certain age. Term is named for the contract's limited length or "term" and is pure life insurance. Term policies generally last for 1, 5, 10, 15, or 20 years, or to some specified age such as age 65 or age 100. 
  • Whole Life: Lifetime coverage at a premium that does not increase with your age after you buy. 
  • Universal Life: Premium amount and death benefit are both flexible. Able to change the amount of your premium payments and/or death benefit after you buy the policy. Increasing your premium payments as you age is important to maintaining your universal life policy.

How Much Life Insurance Should Someone Get?

  • Your life insurance plan should be structured to meet your life circumstances. 
  • How much life insurance a person should get depends on their life situation. Some people have life insurance through their employer, which sometimes use 1x salary or 2x salary as a coverage limit and may allow the employee to purchase additional term insurance.