When you purchase and make regular payments toward a life insurance policy, you invest in your family’s financial security during especially trying times.
If the people who depend on you suddenly and unexpectedly lose your income, they can face short-term issues and long-term problems. From making sure the mortgage and other bills can be paid in the months following a tragic event to ensuring access to higher education for your children years in the future, the right life insurance policy means more peace of mind and a better plan for your family.
Of course, not all life insurance policies are the same. From different types of life insurance and the specifics of the coverage to the potential to add a rider to a policy to and the varying costs, there are many options available. Choosing the right carrier and policy is critical for securing the most effective benefits for your family — and, in some cases, yourself.
Let’s take a closer look at some key specifics related to life insurance, then review how you can find the right policy for your needs.
At its core, a life insurance policy is an agreement between an insurance provider and the policyholder, where the person who purchased the policy agrees to make regular payments (called premiums) to the provider. In return, the insurer will offer a defined payout upon the death of the policyholder, called the death benefit — as long as that event occurs within the limits of the life of the policy and while the policy is in good standing.
To secure a life insurance policy for yourself and ensure if can offer your dependents support, you generally need to:
- Make sure you need a policy, and that the investment in it will be worthwhile. Generally, that means your unexpected death would leave your family and any others who depend on you with significant expenses that would be difficult to address.
- Select a death benefit that would address those financial needs, then seek out policies that offer that level of coverage. You should also consider if you want additional coverage, such as a rider. This type of add-on could allow you to waive the premium payment if you become disabled or help pay for long-term care.
- Review the different policies available and determine which is the most relevant for you. We’ll look at different types of life insurance later on in this article.
- Purchase a policy. This process often, but not always, requires that you pass a medical exam.
- Review the available options and select one. Ensure it offers acceptable terms, including the cost of the premium, the death benefit paid, and any additional coverage you desire.
- Name your beneficiaries, so the policy can provide a benefit to them should a tragic accident or incident befall you.
We’ll take a closer look at the valuable support an independent insurance advisor can provide throughout this process later on. For now, keep in mind that in-depth industry knowledge, an understanding of your individual needs, and the ability to work with several life insurance providers makes an insurance advisor a dependable ally in the search for effective coverage.
With an understanding of the basic process behind securing a policy, let’s look at some common life insurance options available on the market today. This guidance can make it easier to compare life insurance policies in the future.
Term life insurance is temporary, in the sense that each policy covers a specific period of time (called the term). If the person insured by the policy dies or experiences another qualifying event, the policy will pay out the corresponding benefit. When the term expires, the policyholder no longer needs to pay premiums and the policy stops offering protection. Families generally use these policies to address lost income, deal with final expenses, and generally provide a financial safety net following a tragic event.
The time-limited nature of term life insurance can be useful due to the changing needs and circumstances families often experience over time. For example, a family including young children and parents close to the beginning of their careers will likely have more financial needs, should a parent die, than an older family with self-sufficient adult children and significant savings. The term concept also often leads to lower costs, as the risk for an insurance company is lower than with whole life insurance offerings.
Whole life insurance is a type of permanent life insurance, meaning a policy offers coverage from the start date through either the death of the insured or a failure to continue paying premiums. Along with providing a death benefit, this type of policy accrues value over time as the premium is paid, creating cash value that the policyholder can borrow against and use for a variety of needs. Additionally, that cash value can also generate interest that is payable to the insured.
The ability to build accessible cash value in whole life insurance is a key distinguishing factor from term life policies. This function makes whole life insurance coverage more broadly useful than term life, although it also means the premiums are generally more expensive for whole life as well.
Universal life insurance is another type of permanent life insurance, with coverage continuing for policies in good standing until the insured’s death. This type of life insurance policy also accrues cash value and generates interest over time. These policies tend to have lower premium costs than whole life coverage, due to a more modest interest rate and other factors.
The ability to generate cash value and pay a death benefit makes the use of universal life insurance broadly similar to whole life coverage.
Final expense insurance is yet another type of permanent life insurance, with policies in good standing continuing to offer coverage until the insured passes on. Unique factors associated with these policies include a relatively small death benefit, as the intent is simply to address the costs of the burial and other funeral expenses. That means premiums are usually quite modest as well. Additionally, it’s often easier to qualify for this type of policy than other types of life insurance.
With a large number of carriers offering life insurance policies, you have the opportunity to compare differences in coverage, the effect of different death benefit values on premiums, the ability to add riders to a contract, and much more. It’s in your best interest to compare several insurers and find the best possible mix of cost, coverage, death benefit, type of policy, term, and other crucial factors.
National Advisors Group is proud to work with a selection of the very best carriers on the market. These dependable partners offer our clients a range of life insurance options:
- American General Life
- New York Life
- Penn Mutual
- Liberty Mutual Life
- Mutual Of Omaha
- Lincoln National Life
- Mass Mutual
- Protective Life
- Lincoln Financial
- Foresters Financial
By developing relationships with a wide variety of life insurance providers, we can offer options to our customers. Even if one carrier doesn’t provide the coverage you’re looking for or has too strict of a limit on policy addendums, it’s likely that one of our other partners can offer life insurance that aligns with your unique needs.
No single life insurance company can be the “best,” offering superior policies for every potential customer. However, when you have a range of options, it’s entirely possible to find a policy that’s the best for you.
Securing a life insurance quote is often a simple and easy process — especially when you let a trustworthy insurance advisor do the heavy lifting. While a do-it-yourself approach involves investing more time and effort, getting quotes is still straightforward.
You’ll have to share basic information about yourself, as is the case with nearly every type of insurance quote. A request form for a life insurance quote is also likely to request at least some of the following information:
- Medical and health information: To determine eligibility and generate a quote, an insurer will request information about medical conditions and similar topics. They may request readings or levels for your blood pressure or cholesterol, as well as height and weight. They could also ask about medical conditions your immediate blood relatives may face.
- Financial information: Carriers may ask about current debt related to loans and other obligations. You can generally provide an estimate instead of calculating the exact total of your debt.
- Amount of coverage desired: Insurance companies need to know your desired death benefit — the amount paid out in a covered event. For a quote, it’s usually enough to make a good estimate. Consider multiplying your current income by 10 to develop a ballpark figure. Then, add in the cost of college for each of your children — you can estimate about $100,000 each — if they haven’t attended yet.
With a quote in hand, you can make a more informed choice about applying for a policy. Keep in mind that this process can vary significantly from one insurance company to the next. Some carriers require a full medical exam and sharing answers to a variety of health-related questions for an application to receive approval, while others don’t. Some insurers may be satisfied with the questionnaire by itself, or issue policies to anyone who meets basic standards.
Along with the application process, you need to consider a few other key differentiators. Some providers may offer a discount if you pay your premiums on an annual basis instead of monthly, for example. If you want to add additional coverage or another modifier, such as a waiver of premium if you’re disabled or a payout for terminal or critical illness, you’ll need to check if a given carrier offers that option.
With the information we’ve shared, you could start requesting quotes and submitting applications for a new life insurance policy. Wondering why you should work with a team of professionals instead? Consider these factors:
- Time and effort: Each request for a quote that you submit takes valuable time away from your day. When you work with National Advisors Group, you can depend on our team of experienced professionals to take on this often repetitive and time-consuming task, then share the results with you.
- Industry knowledge: Insurance is an incredibly complex field, and life insurance coverage in particular involves plenty of technical language, not to mention many policy types, benefits, options for supplemental coverage, qualifications, approaches to underwriting, and more. Our advisors know how to navigate complex information to bring you the most relevant and effective policy options.
- An understanding of your needs: An informed outside perspective can help you learn about life insurance policy options that may not be immediately visible or relevant, as well as help you develop an insurance strategy based on complete protection.
National Advisors Group takes the time to determine your specific life insurance insurance needs, explore the options offered by our many partners, and then present coverage recommendations tailored to your needs. Whether it’s a term life insurance policy or a whole life policy, completely standard coverage or a need to include riders, we can develop a set of options that focus on building effective protection specifically as it relates to you, your family, your assets, and your goals.
Enjoy a highly personalized approach to securing life insurance coverage — and any other type of insurance you may need. Our experienced insurance advisors are ready to make this often-complicated process much more streamlined and effective. Start your life insurance quote process today!