Life Insurance 101
Updated: Mar 5, 2021
Here is all you need to know about how life insurance works, why you need it, how much coverage costs and how to purchase the protection your loved ones need.
How does life insurance work?
· You can purchase a life insurance policy at any age and for any amount you want.
· That amount is paid out, tax- free, to whomever you assign as a beneficiary of the policy in the event your death.
· It does not matter how you die, where you die or when you die – the insurance will pay – except in rare circumstances where there is an exclusion or in the case of suicide within the first 2 years of purchasing the policy.
· Once issued the insurance company can’t change the premiums or cancel the plan regardless of lifestyle or health changes.
· Life insurance can involve either just a death benefit or a death benefit plus an investment component (where you put in extra money to grow tax free and pay out at death tax free). This type of plan requires the involvement of an insurance expert which we have and trust us we won’t sell you more than you need! Reach out to us via our email….
Why do you need life insurance?
· Life insurance is how you can continue to take care of your loved ones even after you have passed away. It is for your children, your partner, your family.
· Life insurance allows your spouse and children to continue to live the lifestyle they are accustomed.
· It ensures your family does not struggle with debt, that you are no longer around to help pay for, if your family relies on you and your income.
· If you own a home and want a mortgage The bank won’t give you a mortgage without life insurance
· If you are a partner in a business, your company requires buy sell insurance if you want to take out a business loan
How much does life insurance cost?
The cost of life insurance is based on the following factors:
· Age (rates typically go up with age)
· Gender (generally females pay less than males)
· Amount paid out at death ($1 Million costs 10 x more than $100,000
· Smoking status (smokers pay more than non-smokers)
· Your health status and if medical underwriting is required
· Type of insurance policy you purchase
How do you buy life insurance?
Gone are the days when you had to meet in person with a “financial advisor”, go through a detailed analysis to determine the amount of life insurance and type of life insurance you need, then fill out a lengthy application with what seemed like a million questions, give a deposit payment, then a few days later have a nurse come and complete a long process of questions and medical tests, then wait to find out if you are going to get the coverage you wanted.
Now you decide how much coverage you need, apply online and follow the process to payment.
You are just a few clicks away from protecting your loved ones.