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.

In the event of your passing, life insurance provides money directly to your beneficiaries. They can use the money for:

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:

Salary
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?

As a general rule, if there are people who depend on you for financial support, like a spouse, children, or aging parents, then you’re a good candidate for life insurance. If you contribute to your household through cooking, cleaning, or childcare, a policy can account for the costs of replacing that labor. Additionally, if you have debt that another person will have to assume, like a mortgage or student loan debts, it’s a good opportunity to look into life insurance.

What kind of things does life insurance cover?

Life insurance can be used to cover a variety of common expenses, like: Co-signed debt, including student loans
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?

The beneficiary is the person or entity named as the recipient of your policy’s death benefit. It can be a family member, a person unrelated to you, or even a business or other organization. You choose the beneficiary on your own — you don’t need permission from the insurer or the beneficiary. You can also choose more than one beneficiary and designate how you want the death benefit to be split among them, and name contingent beneficiaries in case the primary beneficiaries predecease you.
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?

Technically a beneficiary does not have to do anything to receive your policy’s death benefit, but it’s a good idea to make sure he or she is aware that the policy exists in case there are any delays or complications on the insurer’s side.
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?

Many employers offer life insurance as part of a benefits package. Usually, the amount is a multiple of your salary, up to a limit (usually one or two times your salary). Whether this is enough protection for your needs depends on your financial situation.
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?

The premiums you pay for your life insurance policy are not tax-deductible.

What’s the difference between an agent and a broker?

The difference between an agent and a broker is that an agent usually sells insurance for a single insurer, while a broker sells insurance for any number of insurers.
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.

What happens to the money I pay into a policy if I outlive the coverage term?

If you outlive your term life insurance, the policy expires and you do not receive a refund of premiums paid. You may have an option to convert your term policy into a permanent policy after it expires.

What happens if I can’t pay my policy premiums?

Most life insurance policies include a 30- to 31-day grace period after your payment due date (the exact period can vary by insurer or state). If you don’t pay your premium within that period, your policy will lapse and you will need to work with your insurer to reinstate your coverage. Learn more about life insurance policy lapses.