Navigating Your Life Insurance Policy Purchase

August 3, 2020

AUGUST 4, 2020: Obtaining life insurance coverage is an essential step in securing the financial health of your family if you are no longer in the picture. You will have peace of mind knowing that they will be taken care of if you are no longer there to provide for them.

Navigating to the type of life insurance policy you want, and need is the first step. Reach out to a licensed life insurance agent to help you navigate the types of coverage available.

Here’s a look at life insurance basics.

Term Life vs. Whole Life: What’s the Difference?

Term life insurance provides coverage for a specific amount of time (a term). If you die during the term your beneficiaries receive a payout from the policy. Choices of term policies are usually 10, 20 or 30 years.

Term life insurance plans are more affordable than whole life insurance plans because the term life policy is effective only for the specified term and ends once that term is complete. You would have to apply again to continue coverage. At that point you will be older and maybe not as healthy.

Whole life insurance remains inforce for your whole life as long as you pay your premium. It also builds cash value over time. That is why premiums on whole life insurance are usually more expensive than term life.

It should be noted that a life insurance policy should not be viewed as an investment. All life insurance is meant to provide security and peace of mind for your family.

How Much Life Insurance Should You Get?

Your life insurance agent can help guide you to the best policy coverage depending on your income, family size, and financial obligations. Your agent can also ask the right questions to find out what expenses you need covered and help determine the type of policy that would be the most beneficial to you.

You may be asking yourself - How much money do I need to spend? The answer depends on what type of plan and how much coverage you may need. It's important to consider your complete financial picture before purchasing a particular plan. What will your beneficiaries need to pay after you are gone?

Each client's life insurance coverage needs are unique. If you have more substantial savings and assets, maybe a lower amount of coverage may be appropriate. On the other hand, if you have debt, you may need more coverage. Keep in mind that how much life insurance coverage you buy will affect what your insurance premiums will be.

How Much Will Life Insurance Cost?

Life insurance plans don't come with a one-size-fits-all formula. In fact, the amount you pay for your premium will vary depending on several factors.

These include:

  • Age: The younger you are, the lower your premiums will be, since it’s less likely that you will die soon.
  • Gender: Statistically speaking, women live longer than men. Therefore, the premium for a woman may be slightly lower than for a man.
  • General Health: In general, people who are healthy and have no underlying health conditions will have a lower premium since they are less likely to die early.
  • Family Health: Applicants must provide the carrier with information about their family's health history when they apply. Rates may be higher if there is a family history of particular diseases.
  • Hobbies and Work: Your premiums will be higher if you have a high-risk job or hobby, for example jumping out of airplanes.

The real question you need to answer is why you need the policy. Most people purchase life insurance policies to ensure that their spouse and children are financially protected. Others may purchase a policy to protect their spouse until retirement.

Once you decide on the type of coverage you need, complete the application and underwriting process, and pay your first premium, you'll get a copy of your life insurance certificate. The certificate provides detailed information on the coverage you have purchased, it is a contract.

Talk with a licensed insurance agent to get answers on questions about what type of plan you may need and how much coverage you should purchase. CLICK HERE to set up a call.

About National Catholic Society of Foresters

At National Catholic Society of Foresters, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.