Life Insurance 101

Life insurance is complicated. That’s why the internet is loaded with information explaining nuances between the types of insurance. These articles and videos are valuable tools that can help make informed decisions. But it’s easy to become overwhelmed and feel like you’re sinking in this sea of information. So, if you’re looking for a lighthouse to help you navigate the storm of details, give us a call.

With Quote.Life, you are never alone. Instead of a “cookie cutter” approach to life insurance, our one-on-one approach focuses on your needs. First, we listen to you. We want to understand the reasons you are considering life insurance. Then, we use your goals to guide you through the maze of available options. When you’ve made your decision, you will feel confident that you have made the best choice for you and your family.

Since we will discuss the details of life insurance with you, we are including a high level summary as a basis for our conversation. This information will answer the common questions asked by our clients.

  • Why Do I Need Life Insurance?
  • What Factors Determine Insurance Premiums?
  • Is Employer-Provided Life Insurance Enough?
  • What are the Types of Life Insurance?
  • Which Type of Life Insurance is Best for Me?
  • How Much Life Insurance Do I Need?
  • Does the Policy Need Maintenance?
  • How Do I Apply for Life Insurance?

Why Do I Need Life Insurance?

Are you debating whether you need life insurance? Or, do you think life insurance is too expensive? Do you know how much insurance is right for you? This short video from LifeHappens.org helps answer these important questions so you can decide whether life insurance should be a priority.

LifeHappens.org is a non-profit organization dedicated to helping Americans understand life insurance and related products. We partner with LifeHappens.org to provide this valuable information so we can focus all of our attention on your specific insurance needs. We hope these videos inspire you to take the next step to obtain coverage for your family.

The bottom line…Life insurance is a financial safety net for your family. An active policy guarantees the coverage amount (death benefit) will be paid to your family to ease their burdens.

It is never too early to consider life insurance. Purchasing a longer term life policy (30 years) when you are young and healthy can result in significant savings over the term of  the policy. In addition, you have more affordable options than if you wait until you are older or develop health conditions.

Complete our free Needs Calculator Tool to find a recommendation for the amount of life insurance that is best for you.

What Factors Determine Insurance Premiums?

Insurance companies evaluate several important factors to determine coverage options and monthly premium. The main factors that drive cost are age, gender and medical condition.

Is Employer-Provided Life Insurance Enough?

Employer-provided insurance is typically inexpensive. So if your employer offers life insurance, purchase as much as you can afford. But you need to realize that this avenue for insurance may not provide enough protection that you think.

Most employers offer term life insurance with benefits that decrease over time. With the average job tenure hovering around 4.2 years, according to the Bureau of Labor Statistics for January 2016, portability is more of a concern. Employers rarely offer portable life insurance coverage. Therefore, your protection ends when you leave the company, either voluntarily or by forced dismissal. Depending on your age and medical condition at termination, you may not be able to purchase affordable life insurance coverage.

For these reasons, we recommend the purchase a policy that you can control independently of your employer. Further, we recommend making your purchase as early as possible to reduce the impact of your risk factors on premiums.

What are the Types of Life Insurance?

There are two main types of life insurance: term and whole life. Whole life insurance is commonly known as permanent life insurance. Within whole life, there are two important variations. The diagram below lists the important features of each type of insurance.

Which Type of Life Insurance is Best for Me?

Within each type of life insurance, identified in the above chart, there are a dizzying number of variations. Each insurance provider combines a unique collection of features to create specific life insurance options. Insurance companies evaluate the type of insurance, the selected features, the benefit amount, and your risk factors to determine the cost quoted for each option.

If you didn’t believe me before, I’m sure believe me now… Life insurance is complicated! Instead of leaving you to wade through all of the policy options, with their associated pros and cons, we verbally guide you through the sea of information. Helping you determine the best policy is where our one-on-one approach shines.

The bottom line in choosing the best life insurance option is this: Select a policy with features that support your long-term goals.

How Much Life Insurance Do I Need?

As a rule of thumb, your life insurance policy should provide at least five to 10 times your annual salary. But this is only an estimate. You must consider your specific goals and the needs of your loved ones to determine the amount of insurance coverage best for you.

A good place to start this analysis is with our free Needs Calculator Tool. This tool prompts you to answer questions about your family and finances. It then calculates the amount of recommended life insurance coverage based upon the information you provided. But if you still have questions, don’t worry. We are only a phone call away. We will walk you through the options until you are comfortable and confident in your choice.

Does the Policy Need Maintenance?

You should review your life insurance coverage with each major life event. Life events are changes like a marriage, the birth of a child, the purchase of a home, or incurring new debt. At a minimum, we recommend that you review your policy annually. During this review, you should confirm that your coverage amount continues to support your goals.

Your life insurance policy will remain in effect until one of the following situations occur:

  • You die while your policy is active. When this occurs, the death benefits, paid to your beneficiaries, will not be taxable.
  • You are still living at the end of your policy term. You will need to evaluate your goals to decide whether you still need life insurance. At this time, you will have the option to renew your policy.
  • Unpaid premiums result in policy cancellation. Most providers allow a 30 day grace period before canceling a policy.

How Do I Apply for Life Insurance?

If you are looking for an online, impersonal application process, there are hundreds of insurance agents on the internet. But if you prefer a one-on-one, personalized process, we are here to help you find the best life insurance option for your family.

Our streamlined process starts with a free, 15-minute interview. If you choose to continue with us, we will  guide you through the remaining fast, simple steps to activate your policy. You can find more information on our streamlined process here.

Give us a call at 800-977-8902 when you are ready to start. We’re here for you!