Life Insurance
What Is Life Insurance?
It helps protect your family and gives them financial security in case you are no longer around. Life insurance will pay to the person you name in your policy after your death.
This person is your beneficiary, and you can name more than one beneficiary. Your family can use this money to pay bills, living expenses, and other things. You can also have insurance to build savings and use the funds during your lifetime.
Do I need a policy?
Not everyone needs it. It’s a good idea to get life insurance if you have a family who relies on you financially. There’s more than one way to determine what type of policy you and your family need. If you want to know the amount that’s right for you, think about your debts, incomes, and the bills or expenses your family has.
How do I get life insurance?
It’s easy; you can get life insurance through us, we have the best prices and coverage. We use a process called underwriting to determine the amount of the policy you may need. This includes passing a medical exam and answering questions about health, job, and habits. You must know that any insurance company can refuse to sell you a policy if your examens show high risk because of your health or other reasons.
Some groups — like churches, unions, and other associations — offer group policies to their employees and members — thanks to that, the insurance policy isn’t as strict. In this case, you don’t have to answer questions about your health. As a result, you might be able to get group life insurance even if you cannot buy directly from an insurance company.
Types
Exist two types of life insurance: term and permanent.
What is Term Life Insurance?
Term Life Insurance protects you and your family for a set period. This period is a “term.” The time of the term can be for several years but no less than five. You choose the length of the term. If you die during the policy term, they must pay your family or beneficiaries the amount stipulated in the agreement. The policy is valid only during the term unless you pay to extend it.
Term policies will not provide coverage for your entire life. Some people buy term life policies to protect their families, or they are planning to have children.
The amount doesn’t change during the entire term. If you want to renew at the end of the term, this will cost you more. Because your new premium depends on your age when you renew, not when you originally bought the policy, to help to avoid higher premiums later, consider purchasing a policy with a longer-term.
Most companies offer life term insurance only up to certain age, usually 70 or 80 years.
The most common features of term life policies are convertibility and renewability.
Convertibility If you want to change your policy for a permanent one without having to take a medical exam or answer questions about your health, this is the best choice. It can be helpful if your health gets worse after buying a term policy.
Converting a policy will raise your premiums. If you are around 65 years old, you probably can’t change to a permanent life policy.
Renewability allows you to extend your policy for additional terms, and you don’t need to take a medical exam.
What is permanent life insurance?
This insurance enables you to build savings over time. You can also use it to pay premiums.
A portion of each of your premiums goes into an account, known as the cash value. The variable interest rate can grow on the cash value of your policy. Some policies tie the growth to indexes. It takes several years to build a cash value in this policy. If you remove the money early, you have to pay a surrender fee. If you withdraw more money than you spent on premiums, they can penalize you with taxes. Some companies can cancel your policy if you remove the entire cash value. If that happens, you and your family no longer have coverage and can affect your taxes.
Life insurance haves a higher premium than term life insurance. But if you get a permanent life policy when you’re young and keep it, your premiums will likely be lower than for a Term Life Policy you buy when you’re middle-aged older. That’s because premiums depend on your age when you get the policy.
Types of permanent life insurance.
The two types of permanent life insurance are whole-life insurance and universal life insurance.
Whole-life insurance it’s active for your entire life unless you cash the policy or stop paying premiums.
Some whole-life insurance might pay a dividend each year. With this type of policy, you can get the compensation in cash, add it to your policy’s cash value, or use it to pay premiums. The insurance company does not guarantee dividends. Your compensation could be lower than the company’s projection. You must ask your company about the history of its project’s dividends versus paid dividends before you buy a policy.
Universal life insurance stays active until the maturity date, which is usually age 95. At the maturity date, coverage ends, and you get the cash value.
Universal life insurance is more flexible than whole life; You can change the number of your premiums and death benefits.
Making changes to your insurance could affect how long your coverage lasts. If the cash value reaches zero, your policy could lapse; or if your premiums are lower than the cost of insurance, the difference it’s taken from the cash value.
Universal life policies make a guaranteed minimum interest on the cash value. Variables in policies depend on the performance of the insurance you choose.
One universal life policies have a no-lapse guaranteed. If your premium payments aren’t enough to cover insurance costs, the no-lapse guarantee keeps the policy in effect. It’s essential to pay your premiums on time for the contract to apply.
Get in touch with us to help guide you.
If you or someone else, needs assistance in Spanish, we can help you with that.