What is Life Insurance? Do You Know the Right Answer
If you've never looked into life insurance, sifting through the abundance of information can feel overwhelming. Here, we give you the basics. Get the information you need to make the best decision for your situation, your budget, and your family's future.
What is Life Insurance?
Are you the "breadwinner" for your family? What would happen if you suddenly couldn't provide for them anymore?
Life insurance takes this genuine worry off your plate, giving you peace of mind knowing your loved ones are financially protected. An active life insurance policy ensures your family receives a lump-sum benefit upon your death. They can use this money to pay for your funeral arrangements as well as mortgage or rent payments, tuition fees, and any other living expenses.
Each policy includes four parts:
Do I Need Life Insurance?
If something were to happen to you, your family doesn't lose just you — they lose everything you provide. Whether you're providing a stable income in your household or you're a caregiver for someone in your family, you need to ensure they're taken care of in the event of your passing.
You might want to look into life insurance
if you fall into any of these categories:
Some of these categories overlap, which is all the more reason looking into life insurance now is not only in your best interests but in the best interests of your loved ones.
How Much Coverage Do I Need?
Shopping for life insurance isn't the same as, say, shopping for clothing — one size clearly doesn't fit all.
Everyone's situation is unique. What are your current assets? How much debt do you have? What plans do you have for the future?
You can use our convenient online coverage calculator to assess your requirements based on your distinctive needs.
Use these guidelines to estimate a coverage amount that works for you:
One way to come up with a general coverage amount is by multiplying your current net income by 10.
Alternatively, you can use the "DIME" method for a more detailed breakdown. DIME stands for:
Choosing Length of Coverage
When calculating the amount of coverage you need — whether you need California life insurance, Nebraska life insurance, or anywhere in between — you also need to think about how long the coverage should last. If you want coverage that never expires, permanent life insurance is a good call.
If you only want it during a certain time period — for instance, in the event of financial hardship — term life insurance may be your best choice.
Permanent life insurance is always the best option because, frankly, we just never know the hour or the day. But if you decide to opt for term life coverage, you might want to time your term limit with:
Benefits of Life Insurance
Life insurance carries several benefits depending on your unique situation. Consider this:
Which form of life insurance should you choose?
Permanent life insurance, also known as whole life insurance, offers coverage with no expiration date as long as you pay your premiums. With our affordable plans, this could be the perfect option for you.
Some benefits of whole life insurance include:
For instance, say you're nearing 70 years of age and you're retired. You want to make sure you don't saddle your loved ones with financial worry and expenses when you pass away. You want coverage that won't expire so you can guarantee a death benefit will be paid to your family upon your death for final expenses. Here, permanent life insurance makes the most sense. You're covered for the rest of your life with no worries.
Term life insurance
Term life insurance is meant for just a certain portion of your life. As long as premiums are paid, the coverage remains in effect for the length of the term. Once the term expires, you no longer have life insurance unless you opt to begin another term.