When one considers the phrase “a lifelong project,” it may conjure up images of a major undertaking, requiring many hours and perhaps much capital. However, life insurance, a lifelong project, can be interesting, rewarding and comforting.
Depending on your own life experience, you might recall your parents or grandparents discussing life insurance. A death in the family may have sent everyone searching for any life insurance policy that may have been in effect. On a lighter note, you may remember viewing movies where the “reel” plot revolved around a life insurance policy.
September is Life Insurance Awareness Month and the Life Insurance Management Research Association (LIMRA) provides Facts About Life 2017. So, today we want to discuss life insurance planning and offer some easy to remember guidelines.
Evaluating your life insurance needs
Your life circumstances are undoubtedly a major factor as you consider your life insurance needs:
- Your age will be a factor and affect cost
- If you are employed, your employer may provide a life insurance benefit. Take the time to understand the policy’s features, including if there is a conversion privilege, should you change employers.
- Are you married? Do you have children? If so, could they manage without your income?
- Do you have a mortgage and other installment debt?
- Do you have student loan debt? Yes, we said student loan debt. Learn more here.
Understanding life insurance solutions
Several types of life insurance policies are available, these include:
- Term Life: Less expensive than whole life, it has an end date. A 30-year is typical, depending on your age.
- Whole Life: This will cover you for the rest of your life. Regardless of when you die, your beneficiaries can expect a payout. This type of policy builds up a cash value, which you can borrow against, if needed.
- Universal Life: Known for its flexible features, with a lower cost like Term Life and a savings element like Whole Life. The insured might be allowed to use accumulated interest to pay the premiums.
- Annuities: The insurance company issues a long-term investment to protect one from outliving their income.
- Long Term Care: These policy types typically pay for nursing homes, home health care or assisted living. Some of these policy types can be combined with permanent life insurance, like universal or whole life.
Questions to ask your life insurance agent…
In order to assure that your “lifelong project” is interesting, rewarding and comforting…review these questions with your agent:
- Is there a contestability period? Carefully review your application with your agent, looking at each detail…even the spelling of your beneficiaries’ names.
- Are there any exclusion clauses? An exclusion is a situation in which the policy would not pay out following your death. An example could be, you die while committing a crime. Remember, you are signing a contract. Understand what you are signing. These types of exclusions can vary by state law.
- Is a life insurance medical exam required?
We can be part of your life insurance project team
Since 1946, our John Bailey Insurance team has worked with our clients to assist them in determining their life insurance needs, their budget and their goals. Remember our mission: “we solve problems, provide protection, and generate opportunities for our clients by creating insurance solutions.”
Call us today to discuss your life insurance needs.