Why Buy Life Insurance?
The primary reasons to buy life insurance are to create an estate or to protect an estate. It can guarantee that your family and loved ones will be protected financially in the event of your death. If your income pays for your family’s expenses, including food, clothing, housing and education, your death would mean they would no longer be supported financially. A life insurance policy replaces your income so that your dependents will be protected if you are no longer there to support them. Life insurance can also be used to create an inheritance for your heirs; to cover certain bills such as taxes, funeral costs or other loan obligations; or as a tax-deductible charity donation.
How Much Life Insurance Do You Need?
Although each person’s needs differ based on his/her individual circumstances, most experts recommend obtaining a life insurance policy with a death benefit that is between 5 and 10 times your annual income. However, most people are substantially underinsured based on their income and expenses. To determine how much life insurance you need, you should calculate the amount of your outstanding monthly obligations and anticipated future obligations, such as taxes and/or college costs. Inflation should also be taken into consideration, as your cost of living today can increase by 2 to 10 percent per year due to inflation. Keep in mind that as your life changes – for example, you get married, have children, get a job promotion or buy a home – your life insurance needs change as well. Our office can work with you to help you determine if you have adequate amounts of life insurance coverage in force.
Types of Life Insurance
- Term Life: A term life insurance policy will only cover you for the length of the policy, which ranges from 1 to 30 years. It is the more basic and popular type of life insurance policy. There are 2 types of term life:
- Level Term Life, in which the premium and death benefit amounts remain the same throughout the policy’s term.
- Decreasing Term Life, in which the death benefit decreases at specified intervals (typically each year) for the duration of the policy’s term.
- If you cancel or choose not to renew a term life policy, you do not get anything back unless a ‘return-of-premium guarantee’ was purchased. A return-of-premium option slightly increases the premium, but it also entitles you to receive a substantial portion of the premiums that have been paid.
||Receive up to $250,000 of Term Life insurance without a medical exam. Just answer a few medical questions and apply completely on-line!||
- Whole Life: A whole life insurance policy is coverage that remains in force until your death. Whole life policies consist of two components: The death benefit portion and “cash value,” or savings, portion. Premiums tend to be higher for whole life policies because a portion of each premium is contributed to the policy’s cash value. If you cancel a whole life policy, you will receive the “cash-surrender value”, or cash value portion, of the premiums that have been paid.
- There are different forms of whole life insurance policies, including Universal Life, Variable Life and Variable Universal Life coverage. The differences between these policies exist in how the savings component is invested.
- Accidental Death & Dismemberment (AD&D): Accidental Death & Dismemberment Insurance provides additional financial protection for you and your family in the event of a covered accidental death or injury. It is usually purchased as a rider to a life insurance policy or offered through a group plan… Read More >>
- Disability Insurance: There are several definitions of “Disability” within a disability insurance policy, therefore there are several ways you can be disabled under the terms of the contract. To answer your question in a simple fashion, a disability is a sickness or injury which interferes in your ability to work. Hopefully this answers your first question, “Does this policy cover accident and sickness?” with a resounding yes. Read More >>
- Long Term Care : We offer a wide variety insurance carriers for your long-term care insurance needs. Select “Get Quote” to have one of our insurance professionals provide you with a review of your options. Get Quote
With the right type of insurance policy in place, you can rest assured that your family will be financially stable after your death. You can get a free quote and apply for Life Insurance online – click here. If you require further assistance Health Insurance Specialists, Inc. will work with you to determine which type of life insurance and/or AD&D policy is right for you, contact us online or call our office at (301) 590-0006.