Protection You Trust Part 1: Life Insurance
Life insurance is important.
We at HFM cannot say that enough! And that’s why we’ve brought you this Ultimate Guide to Life Insurance.
After checking out our coverages, were you left asking yourself these questions?
What exactly is life insurance?
How do I find the right life insurance for me?
What different life insurance policies are there, and how can they benefit me?
Yes? Well, now we can answer those questions!
Introducing our new blog post series –
Protection You Trust. Part 1: Life Insurance.
Here we’ll tackle any questions you could have on Life Insurance.
Some people may ask, “What exactly is life insurance?”
Well, life insurance is an insurance policy that pays out when the insured (person who is covered by the insurance policy) passes away or when the policy comes to an end, depending on what type of insurance you have. Basically, it is a security blanket for your loved ones. It can help your family do the following proceeding your death:
debts that the insured may have had
continue a family business
finance future needs like your children’s education
protect retirement plans*
In the event of a tragedy, no one should have to worry about how to pay for everything, and having life insurance will give your family members that piece of mind.
It’s simple and it’s worth it.
Now that you know what life insurance is, let’s talk about the different kinds of coverages you can have.
If you’ve visited our website, you have seen the list of different types of life insurance protection, here’s where we’ll explain what they all mean.
First, individual protection. It is what it sounds like, protection for you, an individual. The same deal with family protection: it’s coverage for a family as a whole. However, many policies are not written as family protection since most insurance policies have the spouse or children as a benefit rider on the policy (for more questions on that, email us here).
Types of Coverage
There are two different categories of insurance ranging from least to most expensive.
The first type is Term Life Insurance. Term life is a type of insurance that lasts for a set time, for example, a 10 year or 20 year term. The policy has a death benefit, in case of tragedy within the term. For these ten years, you will pay a set premium (monthly, semi-annual, or annual payment), usually a lower cost than other types of life insurance.
This premium will not go up during your term. However, when the term is over, your coverage ends and you have the option to continue coverage for another term. The catch though is that the premium can go up now.
Also, a term life policy does not build up cash value for when the term is over. It is very possible for you to outlive your term life insurance (important information here, hence the italics and bold!).
That’s why there are other options.
Besides term life, there is permanent life insurance.
This includes Whole Life and Universal Life.
Whole Life is going to be the most expensive premium and Universal Life will most likely be in between that and term life. Whole life is what it sounds like, you have coverage for the duration of the policy, which is until the policy is cancelled, or you pass away.
Whole life policies will have a higher premium, but they can also build up cash value. This means that if you were to cancel a policy before your death there would be a cash surrender value payable to you. Whole life insurance covers you until death and can build up in cash value, which are good points to consider.
Universal Life is a mix of the two types of insurance.
The cost of universal lies in between term and whole life insurance. Say you pay $45 a month for universal life insurance. The actual insurance only costs $20, so the company puts that extra $25 in a separate “pocket”, if you will. This “pocket” will build interest and cash value. The price of the insurance will go up the older you get, while you’re still paying $45 a month. The extra money that was put aside will pay the difference in price.
The premium you pay is considered flexible, barring a minimum/maximum requirement. This means you could pay a little less or a little more on certain months. A universal life policy is a smart choice, as long as you keep an eye on your little “pocket” of money. If your “pocket” runs out, and your policy is worth $200, you have to start paying that amount, or cancel your policy if you can’t pay that amount. Basically, if you have universal life insurance, you need to keep money flowing into your “pocket” and you’ll be fine.
Also, this cash value in these policies can be accessed for loans or you can surrender the policy for the cash value, similar to a whole life policy.
Between the two major categories (term & permanent), you have the flexibility to pick the death benefit that suits your individual needs: lower cost policies for lower-income households or more coverage for those who want their loved ones to be fully compensated.
Along with term and permanent life insurance policies are the options for annuities or mortgage protection. Annuities are policies that take the money you pay for premium, and put it into an investment. Mortgage protection is similar to life insurance but the money you would collect from this policy after death will only pay off your mortgage expenses.
The benefit to having term or permanent life insurance versus annuities or mortgage protection is that your family members do not have to claim said death benefit as income, and therefore don’t have to pay taxes on that money.
The Right Fit For You
With all these different types of coverages, finding the right life insurance policy for you or a loved one can be confusing.
That’s why we have plenty of people at Hugh F. Miller Insurance to help you sort out all this overwhelming information.
Our Life and Health expert is Mike Edwards, he is part owner of the agency and has been selling insurance since 2001.
Our other life insurance agent is Kane Gillette, who recently joined the agency.
They’re here to guide you through this process.
What is so great and unique about our agency, is that our staff generally specializes in one or a few areas of insurance. This allows our agents and staff members to be focused and exceptional at what they do, instead of taking on too much and being mediocre at a lot of things.
If what we’ve given you today doesn’t answer your questions about life insurance, then by all means call us up or stop in! If you don’t have time for that, go ahead and click here, where you can request a free consultation and voice any other questions or concerns you may have.
Finding the right insurance for you shouldn’t be like pulling teeth, and we’re here for you to make the process easy.
If it’s important to you, protect it with someone you trust.
801 1st Ave Rock Falls IL 61071
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