We all know we need life insurance. Whether we are single, newly weds, or have been married for years and have a bunch of kids. But navigating your specific needs can be tricky. Here are some good topics/questions you should go over with your Keenan Insurance Agent when considering purchasing a life insurance policy.
I already have life insurance through my company. An employer provided life insurance policy is a nice benefit. They are often very reasonably priced and easy to attain (i.e. no health exam required). But the downside is, their coverage is normally pretty limited. It’s not uncommon for a company provided life insurance policy to pay out 1-2 years of your salary. Is that finite amount is really enough to pay all of your family’s bills in the event of your passing? Plus, employer provided life insurance normally won’t go to you from job to job. A personal policy to supplement your employer-provided life insurance can offer nice peace-of-mind for you and your family.
Term or permanent life insurance? Like just about everything else in life, there are pluses and minuses to either scenario you choose, but the main question is, what are you insuring? Term life policies are better suited for finite financial obligations such as a mortgage or college education. Permanent life insurance policies make more sense for things like retirement planning and continuing financial obligations. These permanent life insurance policies can also accrue cash value (as long as you pay the premium), and they normally have a fixed premium that doesn’t go up.
What about Social Security Benefits? For the most part, Social Security Benefits only pay out if the surviving spouse is over 60 or has children under 18 years old. So obviously if your spouse is 52 and you have college-aged children, there would be no social security pay out for 8 years.
Is there any coverage if I become disabled? There are riders that you can add onto most life insurance policies for an additional cost. A disability rider may provide supplemental income and pay your policy premiums. If you become terminally ill with a short life expectancy, an accelerated death benefit rider allows you to collect a portion of your policy’s death benefit. A critical illness rider pays a lump sum if you are diagnosed with a critical illness specified by your insurance policy.
Do premiums go up? If you have a term life coverage, the premiums will not change for the initial term, but if you keep your policy past the term date, the premiums will probably increase. Permanent life insurance rates stay fixed throughout the owner’s life (providing that you pay your premiums and don’t let the policy lapse).
Do I have to get a medical exam? It depends. These days, many companies let you sign up for life insurance by just answering a few basic medical questions. But if you are older, have medical issues, or have a higher value policy, a medical exam may be required to secure coverage.
What is excluded from a life insurance policy? There is no standard life insurance policy, so there are lots of variations from company to company. But basically, companies want to write you. So even if you sky dive or bungee drop off of high bridges, you are likely to be able to get coverage (for an additional premium in most cases). However, most companies have a suicide exclusion that stays in effect for the first year or two of the policy
Can I save money and still have good coverage? The best answer is to buy now. The younger you are, the lower your premium will be, period. Also, bundling a life policy with your other insurance, such as homeowners and auto, can often result in cost savings. Another thing you can do is pay your premium annually. There are often additional monthly fees tacked on when you pay in installments.
You may have other questions in addition to these, but this is a good starting point for you and your agent. Be sure to review your options with your Keenan Insurance Agent in Doylestown PA by giving us a call at 215-345-6670, or requesting a no-obligation quote on life insurance.