The Financial Lady logo

Life Insurance 101: What you need to know!

Mar 11, 2022 | Blog

Life Insurance

73% of Americans have less than $1,000 in their savings. The average cost of a funeral is $12,000 in Texas. Over half of a million people create Go Fund Me accounts to pay for their loved one’s funeral expenses. The funeral is one day, and their family must live after it. It is essential to purchasing insurance so your family will not suffer after you are gone. Take the time to learn and get the protection you and your family need.

My parents believed in life insurance growing up. When I was born, my parents made sure I was protected. They never wanted that financial burden to fall on them or anyone else. Before I got married, my husband and I took out new insurance to protect each other. I am a licensed agent for the state of Texas. Due to lack of knowledge, I see families suffer, lose their homes, cars, and entire savings because they did not have insurance or did not have a comprehensive cover. I ask my clients this question: Which of these are you? “I have insurance; I do not have enough insurance, or my family will have to create a Go Fund Me to bury me”? 75% do not have insurance. So, which of these are you?

This guide will help you decide which insurance is best for you. Your future and family will thank you!

Life insurance is not just for paying for a funeral. It will allow you to do the following:

  • Pay off your mortgage or pay the monthly mortgage installments until the property is sold.
  • Replace your spouse’s income.
  • Build generational wealth.
  • Give to charity.
  • Pay for a college education.
  • Pay off debt.

Terms you need to know:

Death benefit/face amount- the amount of coverage you purchased. For example, one can purchase a policy from $10,000 to $1,000,000.
Term- For a period of 10,15, 20 or 30 years.
Whole Life- Until the age of 100 years.
Premium- your monthly, quarterly, or yearly insurance payment.

Types of Life Insurance:

Term Insurance
  • Coverage for 10,15, 20, or 30 years.
  • Age: 18-65 years old (depends on the insurance company).
  • After the term ends, the premiums will continue. The death benefit may stay the same or decrease depending on the policy.
  • No cash value.
  • Cannot take out a loan.
  • Depending on the company, it may offer living benefits. If you have a heart attack, stroke, cancer, or terminal illness, they will allow you to access the money while you are alive.
  • A large amount of coverage at a low premium.
  • Budget FRIENDLY.
Whole Life
  • Coverage age: 0-100 years old. Newborns can get whole life insurance.
  • Coverage lasts until the age of 100 years old.
  • The death benefit remains the same.
  • Premium never increases.
  • Accumulate cash generally after five years.
  • Can pay the policy in 20 years. Not all companies offer this benefit.
  • Offer Graded policies- if a person has significant health issues, the company will offer coverage after two years. If you die before two years, they will return all the premiums and not pay the death benefit.
Universal Insurance
  • Universal is an interest-led insurance.
  • The interest is supposed to lower the premium if the interest rate stays low.
Universal Index Life
  • Age: 0-50 years old.
  • Good for tax-free retirement.
  • Good way to save for your kids’ college expenses.
  • You can accumulate more cash than insurance.
Accidental Coverage
  • Age: 18-70 years old.
  • Will only pay out if you die of an accident. E.g.: shot, drowning, or car accident.
  • The medical examiner must determine if the cause of death is an accident or natural.

Things you need to know:

  1. Insurance companies look at your medical history, prescription history, and driving record.
  2. They look at your criminal background as well.
  3. Don’t be quick to take a full medical exam to get cheaper insurance. If you are denied because of the physical, then it will be difficult for you to get insurance at other companies. Your name will go onto a database that other companies have access to. Some companies will help you without a medical examination.

Work with a licensed professional like The Financial Lady. Go to https://www.thefinanciallady.com/solutions/ and book some time with me to find the right insurance for you and your family.

Categories

Skip to content