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Navigating Life Insurance

In a very broad sense, there are two types of life insurance:

  • permanent life insurance and
  • term life insurance.

Permanent life insurance is a type of life insurance that can stay in force for your entire life, as long as you pay your premiums in full. Permanent life insurance usually, but not always, builds cash value for you that you can use for expenses later in life.

On the other hand, term life insurance is only in force for a specified amount of time: usually 10, 15, 20 or 30 years. At the end of the term, your coverage expires and you will need to either convert your policy to a permanent life insurance plan (if available) or purchase a new policy for a new term. The advantage of term life insurance is that it's less expensive than permanent life insurance.


Always ask yourself why you need your life insurance policy. If it’s for a temporary goal, then term insurance is probably best. If it’s to address a long-term need or concern, then it’s time to start looking at permanent policies.

How Much Coverage Do You Need?

The biggest decision you’ll face is how much life coverage you need. The general rule of thumb is that, at a bare minimum, you should provide at least enough to pay off your outstanding debts and cover your funeral expenses. The face value of your policy should cover any remainder on your mortgage and other debts, and provide a cushion to help your family get back on their feet financially after your death. If you have young children, you should also cover your expected annual salary multiplied by the number of years until the youngest is no longer financially dependent.

What Factors Are Considered in Assigning a Premium?

There are a number of factors that may affect how much you pay for your policy aside from the amount of the death benefit you choose. These include your age, your gender, the state of your health and any pre-existing conditions, and whether or not you smoke. Smokers can expect to pay higher premiums than those who don’t use tobacco products.

Why Should You Buy Life Insurance?

If you are the major breadwinner or a major contributor to family income, you should be insured. No one likes to imagine what will happen if they die, but it makes sound financial sense. Potentially, your life insurance benefit can mean the difference between your family keeping the home in which you live and losing it to debt if you are no longer able to provide for them. In general, if you are carrying a mortgage, you should carry at least enough insurance to cover the remaining mortgage so that your heirs aren’t left with an ongoing financial impact.

Tips To Help You Save Money on Life Insurance

  • Only buy what you need
  • Get the most appropriate coverage for a mortgage

Term Life Insurance with Living Benefits


Wouldn’t it be nice if term life policies offered benefits while you were still living?

Living Benefits

Living benefits are exactly what the name implies. They are benefits paid from the term life policy while you are living. More commonly, they are known as accelerated death benefits. With these benefits, the life insurance company pays or advances a portion of the policy’s death benefit to you to pay for care or treatment. The company will then pay the balance of the death benefit to your beneficiary(s) if you were to die.

Limitation to Accelerated Death Benefits

It’s important to understand that there are some limitations you need to understand with these types of benefits.

  • State Availability – Accelerated death benefits are not available in every state. Many standard term life policies that offer accelerated death benefits are also limited by state restrictions. Let's discuss what your options are when it comes to Living Benefits.
  • Benefit Limits – Many benefits limit the amount and frequency that you can tap into accelerated benefits. Again, it's important to understand these limits, so let's talk about your options.
  • Fees – Accelerated death benefits are essentially loans against the policy’s face amount. The company will use a benefit interest rate to determine the present value of future benefits. This rate, along with administrative fees will be factored into the amount of the benefit allowed.

It’s a good idea for you to get an understanding of these benefits before you purchase a policy. You don’t want to wait until a critical illness occurs to learn how your policy works.

Give us a call to determine if Life Insurance can be a good fit for you.