Life Insurance
The purpose of life insurance is to be able to provide funds the deceased would have normally contributed to the family income. The question one needs to ask is, "How will my family manage financially when I die?" Death is not what anyone wants to plan for, but when your spouse, your children, or other family members depend on your financially; this is a subject you cannot avoid.
There are several life stages and events that may increase your need for life insurance, which include:
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Getting Married
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Having Children
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Owning a Home
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Changing Jobs
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Retired or Planning for Retirement
All of these increase your financial responsibility, whether it is to your spouse, providing for your children, or paying a mortgage. Having life insurance will protect this responsibility and help your family carry on with their daily living without having to make any drastic changes in their lifestyle when you die.
How Much Life Insurance Is Right For Me? Unsure of how much insurance you need? Click the icon to download this free pdf resource that will help you calculate how much insurance you need. Feel free to use this as a personal tool or fill it out and send it to us to review!
What are the different types of life insurance?
Now that you have a basic understanding of the purpose of life insurance, what it can cover, and why it is an important investment for you and your family, next you need to know what different kinds of life insurance Stewart's Insurance Depot offers. There is not one type of life insurance that fits all people; everyone has different needs and budgets. Below is more information on the following types of life insurance:
Term Life Insurance
Permanent Life Insurance
Final Expense Life Insurance
Term Life Insurance
Term life insurance provides coverage for a specified period of time, hence the word "term". Specified periods of time could be anywhere from 1 year to 30 years depending on your need. Most term insurance coverage lengths are 10, 20, or 30 years. There is a set premium that you pay that increases year by year as you get older. At the end of the specified period of time, your term insurance ends with no value.
The purpose of term is to cover temporary circumstances, for example; having coverage until your child graduates from college or until a debt is paid off. For the most part, term insurance provides the greatest amount of coverage for the lowest initial premium. This type of insurance is most ideal for younger families that are on a tight budget.
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TYPES OF TERM LIFE INSURANCE | |
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Annual Renewable Term |
Level death benefit with an annually increasing premium. |
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Level Premium Term |
Level premium for a specified time (i.e: You pay X dollars annually for a 10 year term). Premiums could increase if you choose to re-new for another specified term. |
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Decreasing Term Insurance |
Level premium with a decreasing death benefit. This is most commonly used for individuals with a mortgage so that he current death benefit can roughly equal the outstanding mortgage. |
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Return of Premium |
Policy owner can receive the sum of the premiums paid after a certain period of time (a set term, which is typically the end of the level premium period). Sometimes the return received will have interest. |
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Permanent Life Insurance
Permanent life insurance provides coverage lifelong protection (as opposed to term life insurance which only provides coverage for a specific term). Some of the most common types of permanent life insurance, as further explained below, are whole life, variable life, universal life and variable universal. The special feature about permanent life insurance is that these types of policies will typically accumulate a cash value, which is tax deferred when it is paid out.
When compared to term insurance, premium payments for permanent insurance are typically higher in the early years of the contract. Your policy stays in-force, most typically until age 100, as long as the premiums continue to be paid as scheduled. Premium payments usually remain the same throughout the life of the policy each year (some policies allow you to vary your premium payment and schedule).
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TYPES OF PERMANENT LIFE INSURANCE | |
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Whole Life Insurance |
Provides lifelong protection and accumulates a cash value on a tax-deferred basis. Premiums remain the same for life. The death benefit and rate of return on your cash value are guaranteed. |
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Variable Life Insurance |
Premiums are set at a fixed rate for life. With the term ývariableý you have the ability to seek potentially better returns by allocating your premiums among investment sub-accounts (i.e: stocks and bonds). The death benefit paid will vary with the performance of the investments. |
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Universal Life Insurance |
Flexible premium payments (you can change the amount). With this flexibility, you must make sure you are meeting the minimum premium amount or else the policy will lapse. There is a guaranteed minimum death benefit that will be paid out to your beneficiary as long as you continue to pay enough in your premiums to sustain that amount. |
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Variable Universal Life Insurance |
Combines the features of variable life and universal life. Premium payment amount and schedule are flexible and you can allocate your premiums among investment sub-accounts (i.e.: stocks and bonds). The death benefit paid will vary with the performance of the investments and the policy will stay in effect as long as enough premiums are paid. |
Final Expense Life Insurance
Final expense life insurance provides affordable protection for your life and ensures the right amount of funds your loved ones will need after your death. Funeral and burial expenses alone can be anywhere from $5,000-$25,000. With final expense life insurance you can ensure that these costs are available to your family.
What can it cover?
Final expense life insurance can cover costs left behind such as:
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Your outstanding medical bills
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Debt you leave behind
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Funeral/Burial costs
Is it right for me?
When determining if final expense life insurance is right for you, it is important to take a look at the features of this type of insurance:
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Provides lifetime coverage
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Level premiums (no increases)
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Opportunity to build policy's cash value
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No medical exam
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You choose how much coverage you need
This type of insurance best fits someone who simply wants to help their family cover any direct costs they may be faced with after your death. For more information or a free quote, contact us today!
For more information on any of these policies, please contact us today! We are happy to discuss any of this information in further detail and help you find a life insurance product that is right for you. Give us a call or email us today:
Camden County, GA: 912.434.2090
Nassau County, FL: 904.729.4025
Metro Cincinnati, OH: 513.868.0040
Metro Indianapolis, IN: 317.570.7271
Nationwide: 866.203.5097
Email: stewartsinsure@yahoo.com