Protecting Your Family with Life Insurance

March 5, 2018

 

As important as life insurance is it's surprising that more people don't own it. If people purchase insurance to protect things such as cars, homes, bicycles, smart phones, televisions, appliances and even pets why don't more people purchase life insurance to protect themselves and the ones they love?

 

These are some of the reasons why some people say they don't don't have life insurance:

 

"I'm young, I don't need life insurance".

"I don't plan to die anytime soon".

"It's too expensive".

"I already have life insurance through work".

"I'm healthy, I don't need life insurance".

"Life insurance is just a waste of money. If I don't die then I just threw all that money away".

"If I die then my family can just sell the house".

"I'm not buying life insurance so my wife can spend the money with her new man if I die". 

"I'm not buying life insurance so my husband can kill me to get the money".

"If I die my family will figure it out".

"My grandmother had life insurance and she lived outlived her policy so it's a waste of money".

"My sister told me life insurance doesn't work". 

 

From our experience of being in the insurance business, we've come to the conclusion that most people really just don't understand how life insurance works. Most people just think that life insurance is something that pays your family when you die. That is correct to a certain extent.

 

Yes, it pays your family when the insured person passes away but there are so many different ways that life insurance can be used. 

 

Our mission at InsuranceQuotesPro.us is to educate America about how life insurance works so they can make a more informed decision when it comes to protecting the ones they love. 

 

Here are the Top 5 reasons why people own life insurance

  1. cover burial expenses

  2. help replace lost wages/income

  3. leave an inheritance

  4. help pay off mortgage/college tuition

  5. supplement retirement income

 

To help understand life insurance a little better let us just explain that life insurance isn't just life insurance. In other words - not all life insurance is the same. There are different types of insurance and there are many different uses and benefits for each type.

 

Let's take a look at some of the different types of life insurance, what it is used for and it's benefits.

 

  • Accidental Life Insurance also know as Accidental Death and Dismemberment (AD&D)

  • Group Life Insurance

  • Term Life Insurance

  • Whole Life Insurance

  • Variable Universal Life Insurance

  • Index Universal Life Insurance

 

 

-- Accidental Life Insurance/Accidental Death and Dismemberment (AD&D) --

Accidental life insurance would pay your beneficiaries in the event that you are killed in a covered accident. The policy will have the written guidelines to what is covered and what is not covered. Natural death such as a heart attack is not covered since it is not considered an accident.

 

If you are seriously injured, lose a limb or suffer blindness due to a covered accident, an accidental policy can provide financial benefits to help you with medical bills and other financial responsibilities. If you are not able to work and have no income coming in because of a serious

injury caused by a covered accident an accidental policy can be very beneficial to have.

 

The policy will have the written guidelines to what is covered and what is not covered. Natural death such as a heart attack is not covered since it is not considered an accident.

 

Accidental Death Statistics

Unintentional injuries have ranked as the fourth leading cause of death in the United States according to the National Safety Council.* The following are three common causes of unintentional deaths that an accidental death insurance policy may pa a death benefit:

 

  • Motor vehicle traffic deaths

  • Unintentional fall deaths

  • Unintentional poisoning deaths

*Source: National Safety Council Injury Facts® 2016 Edition

 

The great thing about accidental life insurance is that it is fast and easy to get covered and there is no medical exam required. You are guaranteed for approval as long as you meet the requirements regardless of your occupation or health.

 

Pros

- no medical exam required

- no waiting period

- no long medical forms or applications to fill out

- guaranteed approval - if you meet the requirements

- full one-time payout of benefits (no installment payments)

- living benefits compensates for injuries suffered in certain accidents causing loss of limbs,            blindness or paralysis.

 

Cons

- doesn't cover natural death

- must meet the covered benefits requirement in order to receive benefits

- doesn't cover injuries or death caused by:

  • suicide or attempted suicide

  • drinking and driving

  • surgery

  • drug overdose

  • mental or physical illness

  • injuries or deaths caused by high risk activities like skydiving, cave jumping, etc. 

 

-- Group Life Insurance --

Group life benefits are usually offered by an employer once you become employed with the company. Since the company pays for most of the premium, the out of pocket that the employee pays for their share of the premium is usually very minimal. If the employer pays all of the monthly premium you may not have to pay anything for your group life benefits.

 

Group life insurance benefits are typically cheaper than if you were to purchase private insurance directly through an insurance company because the employer is getting the benefits at a group rate. 

 

There are two common types of group life insurance benefits that you can get as a benefit package through your employer.

 

Accidental Death & Dismemberment (AD&D) life insurance and there is group term life insurance. As explained in the above section about Accidental Life insurance, it only covers certain types of accidents and does not include natural death.

 

Group Term Life insurance cost a little more than AD&D but it covers natural death unlike AD&D. The employer usually pays most or all of the premium for the group term life insurance benefits. Group term life insurance benefits only cover you while you are employed by the company or until a specific term of coverage ends. If you are no longer employed by the company and wish to continue the benefits you can convert your group policy into an individual policy. Please keep in mind this may cost more than getting an individual policy directly through the insurance company.

 

It is important to check to see what kind of insurance that you have through your employer. Most people think they have life insurance that covers natural death such as in a group term policy but they really only have an accidental policy.

 

There have been numerous cases where someone passes away of natural causes and the family or loved ones call the insurance company to ask about receiving the life insurance benefits to help pay for the funeral only to find out that the policy was an accidental policy and natural death is not an included benefit so their would be no financial benefits payed out. 

 

Pros

  • group life insurance premiums are low

  • group life insurance is sometimes offered by the employer at no cost to the employee

 

Cons

  • group accidental (AD&D) life insurance doesn't cover natural death

  • benefits end when your employment ends with the company

  • converting from a group term policy into an individual policy may be more costly that getting an individual policy directly from the insurance company.

 

--Term Life Insurance--

Term life insurance is insurance that lasts for a specific amount of years, hence the name term. The most common terms are 10, 20 and 30 years. The premium will remain the same without increasing for the entire term. Once the term ends you have you may renew the policy but the premium will more expensive then it was at the time you first purchased it since you are that many years older. 

 

There are two types of term insurance:

 

Term Life Insurance - offers a guaranteed death benefit (of the amount you choose) to your beneficiaries once you pass away.

 

Term Life Insurance with Living Benefits -