Life Insurance 101
Life Insurance Guide
What is life insurance?
Life insurance is a contract with an insurance company. You are protected through the lifetime of the contract in exchange for monthly or annual payments. If you were to die while your policy was active, your chosen beneficiary (more on beneficiaries later) would receive a sum of cash. Your beneficiary might use this money, called a death benefit, to pay final expenses, pay the rest of your mortgage, or cover any expenses for your loved ones. In most cases, the death benefit is tax-free.
Why do I need life insurance?
Life insurance is for your loved ones. Would they be financially prepared to cover the household expenses if you were no longer around to help with the family bills? If you are carrying debt or have a mortgage, would your family be able to cover these expenses in case of your death? Life insurance provides cash benefits to cover these costs, so your family will not face a financial hardship during an already challenging time. We think that life insurance translates into an act of love for those you care about.
Who needs life insurance?
If you were to die, would you leave behind debt, or would your loved ones face a financial hardship? If the answer is yes, you need life insurance.
If you are married, have dependents, own a small business, or you would leave behind a sizable personal estate, you need life insurance. If you are single, you do not have any dependents, or you would not leave behind debts related to business, personal or medical expenses, you probably don’t need life insurance right now.
When should I buy life insurance?
Buying life insurance while you are young and healthy can help you secure lower premiums. Your best bet is to get life insurance as soon as it becomes a must-have in your life. Life events such as marriage, a new baby, and even starting a business can trigger a need for life insurance. If you are planning to have a baby soon, it is best to secure coverage before your pregnancy to ensure you do not face higher premium rates.
We are here to help you find the best-fit plan for your life. Get a free quote and apply online in 10 minutes for a personalized term life insurance policy.
How much life insurance do I need?
When you are shopping for life insurance, you will see a lot of information out there about term lengths and coverage amounts. There is not a one-size-fits-all answer for life insurance: the perfect fit depends on your unique circumstances. You will want to look at your income, your health, your family, and your goals to determine how much insurance you need. And keep in mind that your policy can grow with you, so there is no wrong answer.
To determine how much life insurance you need, ask yourself:
How much do you contribute to your household income?
If you have children, do you want to save money for their college education?
Would your loved ones be financially prepared to cover your funeral expenses?
How much debt would you leave behind?
How will inflation affect these numbers?
Different types of life insurance
Every type of life insurance has its own unique advantages, and many options even pair nicely together. With most options, you can add riders to your policy, meaning that you could protect against a critical illness or disability on top of your 15-year term life policy.
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