Giving you and your loved ones peace of mind.
Life Insurance helps protect exactly what the term suggests: life. More specifically, the lives of your loved ones who depend on you to keep the bills paid and food on the table. Life insurance can come in many different forms and premiums, and here at Great Lakes Insurance, we are committed to helping you every step of the way to pick the right policy for your needs. From choosing between whole and term life insurance and explaining the differences between the two, to making sure you are getting the best rate possible through our brokerage services, we have you covered.
Whether you’re a parent, homeowner, business owner, or simply looking for ways to be smart with your money, it’s important to make sure your family and your assets are protected in the event of an unforeseen catastrophe. Before starting the life insurance buying process, some things to consider before sitting down with one of our highly qualified agents is; the amount of outstanding debt on large assets such as mortgages or auto loans, specific medical condition information, income level, and any other estate planning you may have already initiated. Considering this type of information will help our agents determine how much life insurance you need and what type.
We are here to help give you peace of mind to know loved ones will be able to live out their dreams comfortably, no matter what the future holds. At Great Lakes Insurance, we are committed to giving you the best options to fit your needs, compare premiums, and discuss the pros and cons of term and whole life insurance. We are happy to answer your questions along the way to ensure you are receiving a life insurance package that is easily understandable and customized just for you.
Do I Need Life Insurance?
You need life insurance if you want to provide financial protection for your dependents (or to your creditors) in the event of your death. A business may want to use life insurance to fund its employee benefit plans, protect against the premature death of a key person or to provide for business continuation.
The following are typical examples of family and business purposes to consider when assessing the need for life insurance:
- Dependent children
- Dependent spouse, parent or grandparent
- Credit enhancement
- Key person indemnification
- Business continuation
- Employee benefit plans
Should one or more of these examples apply to you, the purchase of life insurance may be suitable for your needs.
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How Much Life Insurance Do I Need?
The amount of life insurance a person needs will depend on their own circumstances and the reasons for purchasing the policy. One approach to determine how much life insurance you should purchase is to analyze the various needs of your family in the event of the death of a family member. Life insurance may satisfy a number of these needs by providing a fund that can be used to:
- Pay off an individual’s last debts such as medical bills and funeral expenses
- Meet estate taxes and other expenses in settling an estate
- Provide life income for the spouse
- Pay off a mortgage
- Pay for the children’s education
- Provide funds for retirement
- Provide an income for the policyholder’s spouse to give the family time to readjust to a new standard of living
- Draw interest to provide funds for some special purpose or
- Provide a monthly income until the children are grown and out of school
Thus, the current and future financial needs particular to your family can be a significant consideration in determining the amount of life insurance that is right for you. Another factor that may be taken into consideration in determining how much life insurance you need is the amount of your annual salary.
What are the Main Types of Life Insurance Products Available for Purchase?
While there are many types and variations of life insurance products available in today’s marketplace, there are basically two types of life insurance: term insurance and permanent insurance.
Term Life Insurance provides death benefit protection for a certain period such as one or ten years. Death benefits are paid to the beneficiary only if the insured dies during that term period. Generally, term policies do not build up any cash values.
Permanent Life Insurance can provide death benefit protection for your lifetime and the policy will provide for the buildup of a cash value. The cash value may be used in several different ways e.g. you may borrow against the cash value by taking a loan. Permanent insurance includes several different types of policies such as whole life, universal life and variable universal life.
What’s a Death Benefit?
Basically, the death benefit is how much the life insurance policy pays to your beneficiary, untaxed and in a single lump sum, should you die. That amount is considered the “face value” of the policy. Before you ask, “face value” is a fancy way of saying how much your policy is worth. And, just in case, your beneficiary is the person you designate to receive the death benefit.
What is Underwriting
Underwriting is the process an insurance company uses when it selects applicants it is willing to insure and determines the cost of providing coverage. There are common factors that insurance companies may use to decide how much to charge you for the kind and amount of coverage you want to buy, such as:
- your age
- your gender
- your health and health habits (smoking for example)
- your family health history
- whether you are engaged in a hazardous occupation or
- dangerous hobbies (auto racing or sky diving for example)
The insurance company receives this information from your application and may ask you to fill out a health questionnaire or have a health examination or certain medical tests. In addition, the company may request that you consent to the preparation of an investigative consumer report or a Medical Information Bureau (MIB) report.
It should be noted that there are varying levels of underwriting including full underwriting, simplified underwriting and guaranteed issue. Each type of underwriting impacts the premium rates to be charged. Full underwriting would require medical exam. It is comparable to a basic physical. The insurer’s testing company will take your vitals (pulse, height, weight, all that good stuff) and a blood sample. Sometimes they’ll ask for a urine sample, too, or administer an EKG.
Often group life insurance is subject to different types of underwriting. In some cases, employees actively at work do not need to provide any medical information if they enroll within a specified period.
How Do I Compare Cost?
To compare the costs of purchasing a life insurance policy, it is recommended that consumers obtain quotes for similar policies from different companies. Comparing costs only makes sense if you are comparing similar policies. Comparison of costs can become increasingly complicated when products include such non-guaranteed features as dividends or additional amounts. There is no guarantee that a company’s past practices with respect to non-guaranteed features will continue.
Quotes for various products can be readily obtained from many sources, including local agents and brokers, telephone quote services and the internet.
Make sure that you can afford the amount of coverage you intend to purchase. Premiums for some products can change over time and your circumstances i.e. your ability to pay the premiums over an extended period may change as well. When comparing the costs of policies be sure to ask if the premiums, death benefit, or cash values can change over time.
Can I Change My Mind After I Purchase a Policy?
You will have a period that can be anywhere between 10 and 30 days, depending on the terms of the policy, after you receive the insurance policy to return the policy if you are not satisfied and receive a refund of premium. This period is called the “free-look” period, and a “free-look” notice is required to be displayed on the cover page of the policy. Use the free look period to read your policy carefully. If there is something in the policy, you do not understand, call your agent or contact the company for an explanation.
Should I Replace My Existing Policy?
Replacing an existing life insurance policy can be costly and may not be in your best interest. When you apply for a life insurance policy you will be provided with a “Definition of Replacement” form which will explain what constitutes a replacement. If you intend to replace your policy, then no later than when you sign an application for a policy to replace your current policy with a new policy, you will receive a copy of a “Important Notice Regarding Replacement or Change of Life Insurance Policies or Annuity Contracts,” and a “Disclosure Statement.” These documents give you information to think about before replacing your life insurance policy or annuity contract.
Some factors you should take into consideration if you are thinking of replacing your policy:
- Contact your present life insurance company to discuss the proposed replacement of your current policy. Your company may be able to help you make a change to your current policy that is more favorable than replacing your existing coverage.
- Since you are older than you were when you purchased your original policy it is likely the premium for the new policy will be higher due to your age.
- If your health status has changed for the worse the premiums for the new policy will be higher.
- The contestable and the suicide provisions will begin again in the new policy.
- If your policy has a cash-value you should know that the initial costs for such policies are charged against the cash value in the earlier years. The replacement of such a policy by a new cash value policy results in you sustaining these costs again.
- Your present policy may also include surrender charges which you will incur if you surrender your policy during the surrender charge period. Alternatively, there may be a surrender charge period which has already ended on your present policy. You will want to find out if you will be subject to a surrender charge period in your new policy.
Don’t I have Life Insurance Through My Employer Already?
Sure, assuming your employer offers coverage and you’ve signed up. But odds are, that coverage is inadequate. And, even if your company offers the best plan ever, you’ll lose it once you stop working there. That doesn’t mean you should forego life insurance offered by your job. Coverage is coverage and, even if you already have life insurance, your employer’s plan can certainly serve as a supplement. Plus, it’s probably a guaranteed issue policy, meaning you won’t have to undergo a medical exam to get the coverage.
Who Should be My Beneficiary?
We can’t really tell you that. You’ll have to carefully consider all your options and decide what’s best for you and your family. We can tell you, though, that it’s possible to have multiple beneficiaries, so there’s no need to sweat picking between your children. Also, you can update your beneficiaries regularly. So, if you name your new spouse and things don’t work out, you can leave the death benefit to your dog instead. (Also, for serious)