FAQ on Life Insurance
Why do I need life insurance?
Life insurance is intended to provide financial security for individuals or entities that are dependent on someone else's continued ability to provide income. Most people buy life insurance to replace lost income, but it can also be used as collateral for a debt, provide needed income to carry on a family business, pay final expenses, and protect the transfer of your estate to others by providing funds needed to pay taxes.
What are the different types of life insurance available?
There are two basic types of life insurance:
- Temporary insurance (Term Life) provides life insurance protection for a specified duration of time ranging from one year to even decades. It can offer lower premiums, but you are only protected for a limited number of years.
- Permanent insurance is intended to last for a lifetime, regardless of when death occurs. This insurance can come in the form of Whole Life or Universal Life, and will cover the insured for their entire life then pays a death benefit to beneficiaries whenever the insured dies.
How much life insurance do I need?
Life insurance amounts will depend on your specific situation (annual income, debts, family, etc.).
Will my premiums change over time?
That will depend on the type of policy you select:
- Term insurance has the benefit of level premiums for a specific length of time – 10, 20, or 30 years.
- Whole life insurance premiums will remain the same through age 100.
- Universal Life insurance has flexible premiums, but paying less in the early years of the policy could mean you will need to pay more in later years.
What is my beneficiary designation? Why do I need to complete this?
As an insurance policy owner, you select the person or organization that you want to receive the benefits payable from your policy when the insured dies. Selecting the beneficiary is the most important right that you have.