September marks Life Insurance Awareness Month. It’s a reminder to learn more about this coverage and if you already have life insurance, a time to ensure you have the right coverage.
“When you consider your family’s financial future, review your existing financial resources, debts, as well as your family’s current and ongoing needs. We can help you understand the different types of life insurance and compare coverage options,” shares Jeff Novak, President of Advanced Insurance Designs Inc.
3 Questions if You Already Have it
According to the Life Insurance Marketing and Research Association (LIMRA), over 100 million Americans have a gap in their life insurance coverage.
Here are the questions you should review with your family, financial advisor, or insurance agent:
Has your situation changed since taking out your policy?
How much is your death benefit?
As you age, your income typically rises. So does debt (i.e., buying a home, second home, multiple cars). Therefore, it is recommended that your policy should be worth 10-15 times your annual income to ensure those left behind can meet all ongoing expenses.
If you change the policy, what will your new monthly cost be?
Many factors will play into this figure, including the size and length of the policy.
3 Questions When Considering This Insurance
LIMRA research shows that 36% of Americans, primarily Millennials, plan to purchase life insurance this year. If you are beginning this process, here’s what you need to know:
Should you obtain term, whole, or universal?
- Term insurance is for a set number of years, usually from 10-30 years, in which you pay a monthly premium. If you die before the term expires, your beneficiaries receive a payout. Term policies do not build cash value.
- Whole insurance doesn’t have an expiration date. Instead, it is a guaranteed cash value upon your death. In addition, a policyholder may be able to use the cash value while they are still living to pay for things like their child’s education or emergencies.
- Universal insurance works similarly to whole life insurance, but you have more flexibility about taking money early. You can even borrow money and repay it later; although, if there’s any loan outstanding when you die, the policy’s payout can be significantly affected.
Depending on your age, health status, gender, occupation, lifestyle, and income level, one type of policy may make sense over the other. Again, a licensed insurance agent can guide you in this choice.
Preexisting conditions such as diabetes, heart disease, or cancer can impact premium pricing or preclude you from obtaining life insurance.
What are your work death benefits?
Many large organizations offer death benefits that can be 2-3 times your salary. Finding out this figure can help determine how to fill in the gap.
What coverage do you need?
This insurance can pay for your funeral expenses, outstanding debts and cover living expenses. The amount of coverage largely depends on:
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- Your annual salary
- You and your family’s debt, including
- Mortgage
- Medical expenses
- Car loans
- Student loans
- How many dependents do you support
Advanced Designs Insurance Inc. Offers Individual Life Insurance Options
Contact us at 330-753-8700, and one of our benefits specialists will walk you through the options and help you determine if term life insurance, whole life insurance, or universal life insurance are right for you.
