Momentum - Business to Business Online Magazine MOMENTUM October 2017 | Page 41
How Life Insurance Works:
10 Questions to Ask Before Buying
By: Joe Cook, Primary Agent
Nationwide Insurance
[email protected]
Life insurance might not make headlines or trend on Twitter,
but it is important to talk about. Forty-three percent of
Americans say they would feel a financial burden within six
months if the chief wage earner in the family died. Yet, just
44% of Americans have life insurance.
To help consumers understand various policy options, here
are 10 questions you should know the answer to before
buying life insurance:
Question #1: How does life insurance work?
At its core, a life insurance policy provides your family with an
amount of money, called a death benefit, should you as the
insured die.
Question #2: My employer offers life insurance. Why
should I buy an additional policy?
Your employer’s plan may be affordable and easy to enroll in,
but the policy may not provide enough of a monetary benefit
to your family if you die. In addition, you may not be able to
continue the policy if you change jobs. That’s why it’s always
recommended to have an additional life insurance policy.
Question #3: From whom should I buy life insurance?
Look for a reputable company with name recognition and a
history of serving consumers.
Question #4: How much life insurance do I need?
There are two major factors to consider here: your debt, and
your spouse and children’s needs.
You want enough life insurance to pay off all of your debts –
such as your mortgage and car loans. In addition, you want to
leave behind enough money for your family to continue their
current lifestyle. An insurance agent can crunch these
numbers for you.
Question #5: Do I have to get a medical exam to get a
policy?
Some policies may be available without a medical exam, but
those might be more expensive.
Question #6: What’s the difference between term and
permanent policies?
Term life insurance provides a death benefit for a certain
period of time, usually 10, 20 or 30 years, and is typically less
expensive than permanent life insurance.
Permanent life insurance provides both death benefits, and
sometimes may build up cash value. It’s more expensive than
term insurance but never expires, provided you pay your
premium.
Question #7: Why are there so many permanent life
insu rance options?
There are a handful of permanent life insurance options –
but the most common are: Whole Life, Universal Life and
Variable Life. Permanent life insurance typically requires
more premium, but it is designed to last for an entire
lifetime. It’s something you’ll want to discuss with your
insurance agent.
Question #8: Will my premiums increase?
It’s important to know what your premiums will look like
in the future. Some policies are designed to have
guaranteed premiums that will never increase, and others
are designed to be flexible.
Question #9: What is involved in purchasing life
insurance?
Life insurance companies will want to get an
understanding of the health of the individual who is
applying for the insurance coverage. This underwriting
process will typically involve meeting with a medical
professional to gather personal information such as
height, weight, blood work, and medical and personal
questions.
Question #10: When is the best time to buy life
insurance?
The sooner you buy life insurance, the more money you’ll
save. Young, healthy policyholders get great rates, but
older consumers need protection, too. Bottom line – if
you don’t have life insurance, talk with an agent today.
If you still have questions about life insurance, check out
these helpful resources which can help you find out more
about different types of life insurance and how much
insurance you’ll need.
MOMENTUM / October 2017
40