Frequently asked questions
What is life insurance and how does it work?
Life insurance is a contract between you and an insurance company. In exchange for your premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to your beneficiaries upon your passing. This financial protection ensures that your loved ones have the funds necessary to cover expenses like mortgage payments, college tuition, and everyday living costs.
How do I determine the amount of coverage I need?
Determining the right amount of coverage depends on several factors, including your income, debts, and the financial needs of your dependents. A common rule of thumb is to have a policy that is 7-10 times your annual income. However, it’s essential to consider specific expenses such as your mortgage, children’s education, and any other long-term financial obligations. Our agents can help you calculate an amount that provides adequate protection for your family.
What factors affect my life insurance premium?
• Age: Younger individuals typically pay lower premiums.
• Health: Medical history and current health status play a significant role. Non-smokers and those without chronic illnesses usually pay less.
• Lifestyle: High-risk activities or occupations can increase premiums.
• Coverage Amount and Term: Higher coverage amounts and longer terms generally result in higher premiums.
Can I have multiple life insurance policies?
Yes, you can have multiple life insurance policies. People often do this to meet different financial needs. For instance, you might have a term life policy to cover your mortgage and a whole life policy to provide long-term financial security for your family. Having multiple policies can ensure that all your financial bases are covered. Our agents can help you assess whether this strategy is right for you.
What is the difference between term and whole life insurance?
Term Life Insurance: This type of policy provides coverage for a specific period, usually 10, 20, or 30 years. It’s often more affordable and straightforward. If you pass away during the term, your beneficiaries receive the death benefit. If the term ends while you’re still alive, the coverage stops unless you renew or convert it.
Whole Life Insurance: This is a type of permanent life insurance that provides coverage for your entire life as long as premiums are paid. It also includes a savings component, known as cash value, which grows over time and can be borrowed against or withdrawn.