Life Insurance Service In Surprise, AZ
When you get life insurance, you are entering into a contract with an insurance company that guarantees to pay a specific sum of money to your beneficiaries in the event of your death. In exchange, you make premium payments on a regular basis. The amount of your premium is determined by criteria such as your age, gender, medical history, and the quantity of life insurance you buy.
- Making up for your lost income
- Funding a child’s education
- Paying off household debt
- Paying for your funeral and other related expenses Certain types of life insurance may provide benefits for you and your family while you’re still living. For example, permanent life insurance offers a cash value component, which can be used during your lifetime.
There are two main categories of life insurance
Term life insurance
Provides coverage for your loved ones for a set length of time—usually ten to thirty years. When you stop paying your premiums, your insurance coverage ends. Term plans pay out payments if you die during the policy’s term, but they don’t accumulate financial value.
Permanent life insurance
Policies do not expire; provided you pay your premiums, they are designed to protect your loved ones indefinitely. Some of these insurance gain financial value over time.
Term life insurance is the most straightforward to comprehend and offers the best value. It protects you for a set amount of time, such as 10, 20, or 30 years. Online life insurance quotes are available.
Whole life insurance is more complicated and expensive than term life insurance, but it comes with extra advantages. Whole life insurance is the most well-known and straightforward type of permanent life insurance, and it covers you until you pass away. It also has a cash-value account that you may use to get money later on. This is a great benefit that many people use to decide when picking life insurance.
Other life insurance options
If you need lifelong coverage but want more investment options in your life insurance than whole life provides, consider other types of permanent life insurance.
- Universal life insurance pays interest based on current market rates (like those that determine mortgage interest rates).
- Variable life insurance or variable universal life insurance both give you access to direct investment in the stock market.
- Indexed universal life insurance pays interest based on the movement of stock indexes.
How much life insurance do you need?
Your goal should be to develop a life insurance plan (through one or more policies) that, following your death, compensates for the loss of your economic contribution.
Here are two ways to determine how much life insurance you may need. Work with your financial advisor to figure out the best approach for you:
Replacement income need
This is a well-established method in determining the financial contribution you can expect to make to your family from now until you would retire. It’s more than just replacing your income; it accounts for everything you provide for your family, including:
- Benefits/health insurance
- 401(k) and retirement savings
- Personal services you perform for your family, such as childcare, cooking, home maintenance, etc.
- Less, your personal consumption—annual spending on personal needs, such as food, clothing, entertainment, etc.
Survivor needs analysis
This strategy is focused on replacing a portion of the income required for your surviving spouse and children to maintain a chosen standard of living. The demands of your survivors are then compared to their assets, current life insurance, and sources of income to decide if they require more life insurance. A financial adviser or an insurance specialist can assist you in determining an exact amount and selecting suitable coverage. It’s never too early to begin thinking about life insurance and ensuring the financial stability you and your family deserve.
Life Insurance FAQ
How can I determine whether I need life insurance?
What kind of things does life insurance cover?
Mortgages, College expenses for the kids, Living expenses for your family, Stay-at-home labor expenses (cooking, cleaning, etc.), Burial expenses, Loans from family members, Estate taxes that your heirs must pay for other assets
What is a beneficiary?
Your insurer will automatically disburse the death benefit if you die, but it’s still a good idea to tell any beneficiary about the policy so they will be prepared to take action should a problem arise. For this same reason, it’s also a good idea to provide the beneficiary with access to the contract.
Does a beneficiary need to do anything to receive the death benefit?
The insurer will require proof of death and a copy of the contract in order to disburse the benefit.
Is the life insurance my employer provides enough?
Life insurance is more expensive for those who are older or in poor health, so employer-offered life insurance can be a great way to obtain coverage if you can’t otherwise afford it.
Are my life insurance premiums tax-deductible?
What’s the difference between an agent and a broker?
In some cases, an agent may actually be employed by the insurance company, although there are also agents who are self-employed.
If you’re looking for details about a specific insurer’s products, an agent may be the best person to talk to. However, if you’re trying to comparison shop across multiple insurers, you may want to contact a broker.
Agents and brokers always provide their services for free and earn commissions off of the policies they sell.