10 FAQ’s About Life Insurance
How Do I Determine if I Need Life Insurance?
Generally, if you are the primary earner of the house and there are people, like a spouse, children or even aging parents who depend on you for financial support, then you are a great candidate for Life Insurance. Something else to consider would be if you have debt that another person would have to assume, like a mortgage or student loan debts, it’s a wise option to look into obtaining Life Insurance. Even if you are not the primary breadwinner of the house, a stay-at-home mom should look into coverage, as what she provides the family with is valuable and would add financial stress or burden to the family if the services she provided had to be replaced (I.E. Grocery shopping, child-care, transportation).
Some people are confused with how much Life Insurance they need. They also don’t know what type of Life insurance to buy. This is even more apparent with Millennials. Approximately 60% of Millennials surveyed felt this way. Speak to an experienced professional who can guide you to the plan that is best for your needs.
What is a Death Benefit?
Basically, the death benefit is how much your Life Insurance policy pays to your beneficiary, untaxed and in a single lump sum, should you die. That amount is considered the “face value” of the policy. The “face value” is just a fancy way of saying how much your policy is worth.
What Are Some Things that Life Insurance Covers?
Life insurance can be implemented to cover a wide variety of common expenses. Here are some of them:
- Co-signed debt including student loans
- Mortgages
- College expenses for the kids
- Living expenses for your family
- Stay-at-home labor expenses (cooking, cleaning, etc.)
- Burial expenses
- Loans from family members
- Estate taxes that your heirs must pay for other assets
What is a Beneficiary?
The Beneficiary is the person or entity named as the recipient of your Life Insurance policy’s death benefit. It is typically a family member but can be a person unrelated to you or even a business or other organization. You can choose your own beneficiary; you don’t need permission from the insurer or the beneficiary. You may also choose more than one beneficiary and designate exactly how you want to disperse the death benefits among them.
Your insurer typically will automatically disburse the benefits should you die, but it is still a great idea to tell any beneficiaries you may have appointed about the policy specifically so he or she can be prepared should a problem arise, as well as provide them access to the contract.
Making sure your family is protected is important! Obtaining the right coverage for you and your family can seem challenging but we are here to help!
To Receive the Death Benefits, Does the Beneficiary Need to Do Anything?
Technically, a beneficiary doesn’t have to do anything in order to be able to receive your Life Insurance Policy’s death benefit, but it is generally still a good idea to make sure she or he is aware of the policy’s existence in case there are any complications or delays on the side of the insurer. Proof of Death and a copy of the death certificate will be required by the insurer in order to be able to disperse the death benefits to the beneficiary appointed so it would be a good idea to let your beneficiary know these facts so they can be prepared in the event that something happens, if would be one less stressful factor if they are prepared. Losing a loved one is already difficult so any way that you’re able to streamline the process for your loved ones is a good thing.
Is the Life Insurance Coverage Provided by My Employer Enough?
As part of a benefits package, many employers will include Life Insurance. The amount is usually a multiple of your salary up to a certain limit (Usually one or two times your yearly salary). Your specific financial needs and situation would determine if this is enough protection for you. As a general rule, Life Insurance is more expensive for those who are older or in poor health, so many times the policy offered by your employer can be a great way to obtain some form coverage if you otherwise wouldn’t be able to afford to do so. It is a good idea to really look at what they offer through your employer, and consider using that coverage and obtaining a more permanent policy as well. This can be extremely beneficial if the coverage through your employer isn’t quite enough. Some group plans through your employer are fully comprehensive so it really depends on the coverage your employer has to offer, if any, for you to decide if you need more protection or if what you have satisfies your coverage needs.
Are My Premiums Tax Deductible?
No, The premiums you pay for your life insurance policy are not tax deductible.
What is the Difference Between an Agent and a Broker?
The difference between and Insurance Agent and an Insurance Broker is that an agent sells insurance typically for a single insurer, whereas a broker sells insurance for any number of insurers, offering a wider variety of policies and plans to suit your needs.
If you’re looking for details about a specific insurer’s products that you have been looking into obtaining, an agent may be the best person to talk to. However, if you’re trying to comparison shop across multiple insurers, you may want to contact a broker. A broker is more likely to be able to find and offer you a more suited policy, better rates, and other variables that suit your specific insurance needs.
Brokers and agents alike provide their services for free and earn commissions from the policies they sell. If you would like more information or to work with a highly accredited broker service, please contact us at Group Plans, Inc!
19 Million Shoppers Begin to Buy Life Insurance – but never finish. Make sure you and your family are secure by getting yourself and your family covered with a Life Insurance policy that gives you a sense of comfort knowing your family will not have the extra stress or burdens should anything happen.
Can You Have More Than One Life Insurance Policy?
Yes, you can have more than one policy with the same insurer or from a different insurer. Some people even choose to have both Term Insurance and Permanent Insurance simultaneously, especially if some form of coverage is offered through an employer.
Do I Have to Pass a Medical Exam and If So, How Hard Is it to Pass?
If you’re in good health, you should have nothing to worry about whatsoever. Make sure to drink plenty of water a few days before the medical exam and follow the nurse’s instructions, especially if they tell you not to eat the morning of the exam.
If you just cannot go through with it then there is always No Medical Exam Policies. Generally, you will pay more for these kinds of policies than if you qualified under the standard underwriting, but the process is faster and can still be a good option for the right person or situation.
If you’ve heard that the medical exams for a Life Insurance Policy are difficult to pass, or if you’ve ever been declined in the past, don’t assume that a no medical exam plan is your only option. Each company is going to have different hoops to jump through. If one insurance company declines you, it doesn’t mean that every company is going to. It’s important that you find a company that is going to accept your plan, but more important to make sure your coverage needs are met.