Why and When
Do I Need It?
• Life insurance is a contract that
pays a beneficiary in the event of
your death as long as the policy
is in effect.
• Life insurance is something you
buy for those people you leave
behind. Life insurance covers
your expenses such as funeral
and medical bills. You may also
need to leave financial support to
Who Needs It?
• Single - Consider life insurance for retirement and estate
planning. And if you’re young and healthy, now may be
the best time to lock in a low rate.
• Married or Getting Married - You are not in this alone
anymore. Your spouse depends on you in lots of
ways. Losing you to an accident or illness would be a
huge emotional loss for them. Having the right amount
of life insurance can help make sure it’s not a huge
financial loss as well. Isn’t it important to help secure
your family’s future?
• Buying A Home - Buying a home is one of the biggest
purchases you may ever make. Did you know that life
insurance can be used to help pay off your mortgage
and keep your family in their home should something
happen to you?
Types of Life Insurance
Basically there are 2 types of life insurance:
Term Life Insurance
Term Insurance The most basic and least
expensive type of life insurance. You buy
coverage for a certain amount of time, such as
10, 15, 20 or 30 years. If you die before the
term is over, your beneficiary gets the benefit
stated in your policy. If you live beyond the
term, the policy expires.
Therefore, if you purchase a 30 year term
policy at the age of 20 you will not have any life
insurance beyond the age of 50
Whole Life Insurance
Whole life or Permanent Insurance This type
of policy never expires. As long as premiums are
paid, it remains in force. Premiums are usually
based on your age at the time of purchase and
generally remain level. In addition to providing a
death benefit, premiums are also invested to
produce returns – adding cash value to your
policy. There are three major types of whole life
or permanent life insurance: traditional whole
life, universal life, and variable universal life.
Types of Whole Life
• Traditional Whole Life You'll pay the same amount of premium
for the rest of your life. (Start young and the less expensive the
premiums will be.) Your cash value will accumulate based on a
guaranteed rate. As long as your policy is current, you can borrow
against the cash value at the current policy loan interest rate.
• Universal Life gives you more flexibility. You pay a set initial
premium, but after that, you decide when and how much you want
to pay. How does this work? The insurance company simply charges
the insurance cost from your cash value account.
Variable Universal Life
This insurance combines some features of policies to create a more
flexible life insurance product. As with universal life policies, you
decide, after the initial premium, when and how much more you
want to pay into your policy. You can adjust the death benefit, plus
you have the wide range of investment options. Your cash
value will increase or decrease, depending on the performance of
the underlying funds.
Filing a Claim
Unfortunately, someday you may
responsible for dealing with the
loss of a loved one.
What are the four steps in filing a claim?
• 1. Obtain several copies of the death certificate.
• 2. Contact your insurance agent.
• 3. Submit a certified copy of the death certificate (or
acceptable alternative in extraordinary circumstances)
from the funeral director with the policy claim.
• 4. Once a life insurance claim is submitted, you will
need to determine how the proceeds will be
In some cases there are four settlement options:
• Lump sum: You receive the entire death benefit in a single amount,
which allows you to use what you need for immediate expenses and
invest the rest.
• Specific income provision: The life insurance company pays you both
principal and interest on a predetermined schedule.
• Life income option: You receive a guaranteed income for life. The
amount of income depends on the death benefit specified in the life
insurance policy, your gender, and your age at the time of the insured's
• Interest income option: The company holds onto the proceeds and
pays you interest. The death benefit remains intact and goes to a
secondary beneficiary upon your death.
Why do life insurance
companies generally require
• You will be classified based on age, height, weight,
nicotine use and other health factors, such as any
history of high blood pressure or depression. Your health
status will determine what rate class category you fit
in, so even if you have some health problems, you could
The rating class that you fit into will determine the price
you pay in premiums.
As you can guess, a smoker
will pay a higher premium than
a non-smoker and an over-weight
person will pay more than a thin person.
Buying insurance when you are younger, healthier and a
non-smoker will save you money in many ways.