We have all heard of life insurance, but what do we really know about it? Generally, life insurance is a policy that pays a certain amount of money in the event of one’s passing; the funds are given to the beneficiary listed on the insurance policy. This is how it generally works:
– You decide you want to obtain a life insurance policy.
– You enter into a contract with an insurance company that offers life insurance.
– You pay premiums in exchange for a lump sum to be paid to the person(s) you list as beneficiaries in the event of your death/passing.
There are different types of life insurance policies:
Term life insurance– provides financial protection for a period of time, for example, 5, 10, 20 years. Premiums are fixed for the term selected, but usually increase after that term.
Whole life insurance– this is a permanent life insurance policy designed to provide coverage for a lifetime. Premiums on a whole life insurance policy are generally fixed.
Universal life insurance– this type of insurance is very similar to whole life insurance, universal life insurance is a type of permanent coverage, however; these policies are flexible. With this policy, you can lower or raise premiums and change coverage throughout the lifetime.
If You Are Buying Life Insurance for The First Time- Consider the Following Tips
What and who are you protecting? Before purchasing a life insurance policy, you should know and understand the what and the who; today and future changes such as marriage and the purchase of a home. This will help you determine the type of life insurance policy you need.
What can you afford? Life insurance can be a bit pricey. You want to be able to afford the premiums. Keep in mind that some financial protection is better than none.
Beneficiaries, who are they; people, businesses, or charities, etc.? You want to make sure that you think through your beneficiaries.
The insurance company that you enter into a contract with, are they reputable? It is important to establish a life insurance policy with a financially sound insurance company.
Have you done enough research? Take some time to really review life insurance policy options and familiarize yourself with the insurers out there.
Have you considered a life insurance agent? Working with someone that is licensed and knowledgeable about life insurance can make a huge difference.
Do You Know About Life Insurance Riders?
Some insurers offer life insurance riders. A life insurance rider allows the policy owner/ holder to modify their plan. There are a few types of riders and keep in mind, riders are not offered by all insurers.
Accidental Death Benefit rider– offers coverage in the event that the insured’s death is an accident.
Waiver of Premium rider– waives premiums in the event that the insured becomes disabled and unable to work.
Accelerated Death Benefit rider– allows the insured to collect a portion or all of the death benefit.
Discussing with one of our agents is the first step. Give us a call today!
About Ryan Ruffcorn
Ryan grew up in Keokuk, graduated from Keokuk Senior High, and started his agency in Keokuk from scratch in 2003 after having worked for one of the largest international accounting firms, KPMG, LLP.
Ryan is hardworking; his loyal and trustworthy character is exemplified by the way he does business. He thoroughly enjoys helping clients through the insurance buying process to secure coverage for their most valuable assets.