Life Insurance for Dummies
Nothing is more valuable than your life and your loved ones.
That’s why life insurance is so important.
No one likes to think of not being there for their loved ones. It helps to know they will be financially protected should the worst happen.
If you are unsure of how it works, you’re in luck, because we’re offering an informative life insurance for dummies guide.
- What is Life Insurance?
- How Does it Work?
- Do You Need Life Insurance?
- The Different Life Insurance Types
- Survivorship Policies
- The Life Insurance Coverage You Will Need
- How to Qualify for Life Insurance
- The Life Insurance Qualification Process
- Conclusion on Life Insurance for Dummies
- Read More About Life Insurance for Dummies:
- Shocking Life Insurance Statistics Heading Into 2020
- Life Insurance Agents: Independent vs Captive
- Life Insurance Premiums: What are they & How are they Determined?
- Life Insurance for Young Adults & Millennials: It’s Cheap!
- The Financial Costs of Dying without Life Insurance
- Simple Tips When Choosing the Best Life Insurance Provider
- 8 Benefits of Life Insurance You May Not Have Known About
- 11 Best Types of Life Insurance Policies Reviewed
- Is Life Insurance Taxable? An Important Beneficiary Guide
- Is A Modified Endowment Contract (MEC) Right For Me?
- Is Dave Ramsey Right About Life Insurance?
- Life Insurance for Motorcycle Riders: What Rates to Expect
- Single Premium Life Insurance: All Premium Payments Paid at Once
- Benefits of an Irrevocable Life Insurance Trust
- Life Insurance Grace Period: Last Chance to Pay
- Don’t Select Quotes for Life Insurance: Ask for Help
- Life Insurance Underwriting: What to Expect When Applying
- Types of Life Insurance Beneficiaries: Primary vs Contingent Beneficiary
- Life Insurance Payout After Death: Claim Process & Timeline
- How Much Life Insurance Can I Get & The Rule of Thumb Theory
- The Facts About Life Insurance and Suicide
- Life Insurance Death Benefit: The Most Important Features Explained
- What Is Insurable Interest in Life Insurance?
- Medical Information Bureau (MIB) & Its Role in Life Insurance
- How Does Life Insurance Work?
- The Ultimate Guide to Understanding The A.M. Best Rating Scale
- Guide to Understanding Mortgage Life Insurance
- 10 Tips For Finding Cheap Life Insurance
- What Is a Life Insurance Exam Test For?
- Life Insurance Cost: Why You Can’t Afford to Not Be Covered
- Life Insurance and More: The 10 Financial Goals Everyone Needs to Have
- Life Insurance Quotes for Residents of Los Angeles, California
- Universal Life Insurance with Return of Premium
- U.S. Life Insurance for Foreign Nationals and Non U.S. Residents
- Unique & Traditional Life Insurance Policy Riders
- Affordable Life Insurance Coverage
- Life Insurance Health Classifications
- Life Insurance Policy Review
- 3 Tips for Getting the Best Price for Life Insurance Coverage
- What is the Best Life Insurance Coverage?
- I Was Declined for Life Insurance Coverage
- Non-U.S. Citizen Life Insurance
- Permanent Life Insurance Quotes
- How to Prepare for a Life Insurance Medical Exam
- Life Insurance Terms & Definitions
- Life Insurance FAQ
- Life Insurance Application Process
- How Long Does It Take To Get A Life Insurance Policy?
- Life Insurance Coverage for Stay at Home Parents
What is Life Insurance?
Life insurance is an insurance policy that will pay out a financial sum to your family when you die.
If you have dependents relying on you for an income, it helps to have life insurance in place.
Your family will receive a one-off cash lump sum in the event of your death.
Plus, you will have the peace of mind knowing they will be okay if you can no longer be there for them.
The family will be able to use the lump sum to pay for your funeral, remaining bills and could even replace an income.
Shockingly, only 44% of American households currently have life insurance, despite its benefits.
How Does it Work?
Not sure how it works? Our life insurance for dummies guide can help.
All it takes to receive coverage is to pay a monthly payment to a life insurance company.
When you die the company will pay the total coverage amount to your chosen beneficiaries.
If you stop paying your monthly premiums, the life insurance company will have no choice but to cancel the policy.
Consequently, your beneficiaries will not receive the coverage amount.
Do You Need Life Insurance?
Not sure if you need life insurance?
You must ask yourself: will your family survive without your income?
If the answer is no, you will need life insurance.
In one survey, 70% of US households with children under 18 years old, stated they would struggle to meet daily living expenses if the primary earner died.
Unfortunately, someone will have to handle the finances following your death. It could be your parents, partner or children.
Life insurance can reduce a loved one’s suffering, as they won’t have to worry about funeral costs or bills. So, they can focus on the grieving process rather than worry about finances.
The Different Life Insurance Types
There are many different types of life insurance products on the market, so it can be a little confusing.
You can often categorize all the products into two products: Permanent life insurance and Term life insurance.
Take a look at the difference between the two products in our life insurance for dummies guide.
Permanent Life Insurance
If you are looking for a life insurance product for your whole life, this is the product to choose.
Different products will have different options, but you can stop paying in your 90s or pay for a lifetime. The choice is yours.
Permanent life insurance is often the umbrella term for different policies.
So, you can choose from:
- Universal life insurance
- Whole life insurance
Whole life insurance offers a fixed premium throughout your lifetime.
Yet, universal life insurance is a little different. It also offers an investment policy.
A portion of the payment will be an investment, which you can choose to borrow in the future.
Many insurance providers will refer to the investment option as “cash value.”
The policy is more expensive than whole life insurance, as a result.
Understanding Cash Value
We understand the whole life insurance process can be a little confusing. There are so many terms to keep up with that it can leave you scratching your head.
That’s why life insurance for dummies can help you make an informed decision. You will obviously be a little cautious about where you place your finances.
A policy with a guaranteed cash value for a guaranteed premium can be a smart financial move. Cash value works with a larger premium at the start of a permanent policy than in a term policy.
The extra premium will be invested into a different account. The policyholder or insurer will also have access to the account to grow the cash value.
The gains earned can be used to:
- Increase your coverage amount
- Keep the policy and stop paying monthly premiums
- Keep the cash value for borrowing in the future
It is advisable to keep the cash value policy until you reach retirement age or death for probable gains.
Tax Benefits for Universal Life Insurance
Another big benefit of investing in universal life insurance is the tax benefits.
The annual earnings on the investment section of the policy will not get taxed. Once you cash out on the policy, the taxable gains are reduced due to the insurance protection.
Also, once you die, the beneficiaries amount will also not face a tax.
So, it can make great financial sense to opt for a universal life insurance policy.
Aren’t you glad you clicked on our life insurance for dummies guide? We thought so.
Term Life Insurance
Heard about term life insurance but not sure what it means? Our life insurance for dummies guide can help.
Term life insurance is more temporary than permanent life insurance. That’s because it will only provide protection for a short-term period.
For instance, you can select a policy to provide coverage for a 10-year, 20-year or 30-year term.
The rate you choose will be locked in for the term period. You also will be unable to move up or down in insurance levels.
So, if you passed away within the term period, the beneficiaries would receive the lump sum. If you die outside of the term period without renewing the policy, your loved ones will receive no money.
Many people often turn to term life insurance for short-term financial protection.
For instance, you might now be paying for your child’s college tuition or are paying a mortgage. Yet, the expensive bills will be gone in 10, 20 or 30 years time.
It’s important to note that most reputable insurers may allow you to move to a permanent product. Yet, you may have to pay larger monthly premiums due to your older age.
Not sure what policy type to choose? Bookmark our life insurance for dummies guide to refer back to down the road.
Do you want to take out a joint policy with your partner?
You could always consider a survivorship policy, which covers more than one person. There are different policies to choose from.
For instance, you can select a policy that will pay out the lump sum once the first person dies.
This policy can be a little more expensive than a plan that insures only one person. Yet, it can be a more affordable option than two individual life insurance policies.
You can also choose from joint and survivor or last to die life insurance plans.
The insurance policies pay to beneficiaries when the second person dies. The policies are also available for permanent or term coverage.
If one person has good health, the underwriting criteria might also be less strict.
The Life Insurance Coverage You Will Need
No one wants to think of their loved ones struggling to pay their bills.
Life insurance can help you provide for your family when you are no longer in their lives.
To identify how much money you would need to leave behind, you should calculate your expenses.
For instance, do you need to pay for your children’s college tuition or pay for a mortgage?
Try to estimate the cost of your death and the amount your dependents would need to be comfortable.
The best way to identify the cost is to fill in our instant life insurance quote.
Choose the coverage wisely. 40% of consumers believe they don’t have enough insurance to meet their long-term needs.
How to Qualify for Life Insurance
Traditional life insurance is often determined by the risk of your death.
To identify the risk, they will review your:
- General health
- Health history
- Background history
Your general health will determine your qualification.
Many life insurers will have a class rating to determine if you will receive coverage.
If you have a serious or life-threatening condition, you may not qualify for coverage.
If so, consider a life insurance policy that requires no medical exams or questions. It often guarantees to approve a policy.
You may also not qualify for coverage if you are still on probation for a felony.
If you are, you must wait for a year after the probation period is complete to receive the coverage.
Other people who may also not qualify are people who often embark on risky jobs or hobbies.
For instance, a pilot might not qualify or will receive a higher rate for life insurance.
The Life Insurance Qualification Process
Unless you choose a no medical exam policy, you will have to detail your medical history.
You might also have to meet a paramedical professional to answer health questions. They will take a blood and urine sample.
If your test and answers meet the insurer’s criteria, you can qualify for insurance within a day or two of the life insurance exam.
Conclusion on Life Insurance for Dummies
Unfortunately, you can’t always be there for your loved ones. A policy will ensure that your family will be financially protected.
We hope life insurance for dummies has helped you to make an informed decision.
Don’t forget to share our handy life insurance for dummies guide with loved ones without insurance!
If you want to get the ball rolling, we encourage you to contact us today to discuss your policy needs.
Read More About Life Insurance for Dummies:
Insurance is one of those bittersweet concepts to most people. On the one hand, it’s one more expense to add to your neverending list of bills. On the other hand, it’s a financial safety net you need to know exists. A recent report about life insurance statistics, however, has dropped jaws to the floor across
A life insurance agent can help you navigate through one of the most important financial decisions you’ll ever make. Most will agree it is a pretty important decision. One survey pegs the number at more than four-in-five people classify life insurance as a necessity. That said, less than two-thirds actually have it. Not having life
Do you speak life insurance? While not technically its own language, it can feel like it if you’re unfamiliar with a few of the specific terms. To help you, we’re breaking down a commonly-used piece of life insurance jargon: premiums. What are they, how much do they cost, and who has to pay them? The
What’s the similarity between home ownership and life insurance? The answer…They both play integral roles in the American Dream. After all, having either one (or better yet, both) indicates a better quality of life. That’s why those stories about millennials giving up home ownership are all but a myth. In fact, it’s thanks to them
Your own death is already going to be hard enough on your family without them having to worry about finances and debt. But that’s exactly what would happen if you ended up dying without life insurance. Unfortunately, this is an common occurrence. Many people don’t even think of life insurance until it’s too late. This
Thinking about buying life insurance? Have you started your search on finding a life insurance provider, but find it to be a bit of an overwhelming process? With several available life insurance providers out there how do you go about choosing the best one? While it’s great to have several choices, it can be difficult
Life insurance used to be thought of as only something older people needed to worry about. This thought is far from the truth. Thanks to further education and changes in how we discuss life insurance, more people know about the benefits of life insurance. Now that more people understand the benefits of life insurance and
According to a recent survey, about 37 percent of Americans do not own any life insurance policies. One of the main reasons for this is that they think it’s either too expensive or do not understand it. There are many types of life insurance policies. Trying to figure out which types of life insurance best suit
Is life insurance taxable? This question is one of the most frequently asked questions when it comes to life insurance. The short answer to this very popular question is, no it’s generally not. In most cases the death benefit received from a life insurance policy is tax-free. Keep reading to learn more about life insurance and
Planning out your life is one of the most seemingly impossible things to do. You can’t control everything that happens, but you can certainly prepare for what could happen. That’s why purchasing a modified endowment contract may be a smart move on your end or a nightmare. A modified endowment contract is a policy for
Think that all life insurance policies are the same? Not sure if your coverage is sufficient to cover your family’s needs in case of the loss of you or your spouse? Life insurance can be a daunting thing to consider. At its core, it covers two areas most of us aren’t comfortable examining: Our mortality and our
Motorcycle riders are familiar with the feeling of the wind whipping through their hair as they speed down the highway. There is arguably no better way to get to your destination. As fun as riding motorcycles is, though, finding good life insurance for motorcycle riders is a bit of a drag. Motorcycle riders are forced to
When it comes to buying life insurance, you’ve got many options. As such, figuring out which policy type is the best can be tricky. How much insurance do you need? How should you space out the premium payments? Who will ultimately benefit from the money? Questions such as these are common inquiries — and for good
Nobody likes to talk about death. Eventually, though, it’s one topic of conversation we all get to. Life insurance is a sad but necessary part of that conversation. We take out policies that protect our families, our loved ones, by paying out in the event of our deaths. Something not a lot of people know
When it’s your life on the line, it pays not to mess around. Forgetting a payment, or not being able to meet one, is easy to do in the hubbub of modern life. This is especially true thanks to cascading debt in the average American household. Luckily, there’s such a thing as a life insurance grace
The loss of a loved one is devastating, to say the least. Without a proper plan in place, your loved ones can find themselves in a financial debacle unable to meet their needs. Life insurance is a pledge to give financial protection to your loved ones when you’re not present to do it anymore. This
Are you worried about what will happen to your dependents’ financial security after you die? It’s a common concern, but there’s an easy way to ensure your family’s finances are stable. By purchasing life insurance, you can fiscally help protect your loved ones by continuing to provide for them after you’ve passed away. The process of
Whether you’re a wife or husband, or a mother or father, you have someone that’s important in your life. It could be a spouse or it could be your children. It may be a friend or even a business partner. Either way, you love them and want to make sure that they’ll be taken care
When it comes to Americans’ top financial concerns, money after retirement leads the list followed by other retirement-related concerns which are long-term care and medical expenses. These concerns helped build consumer interest in owning a life insurance with 9 in 10 people agreeing on its importance. Most of the millennials (77%) now recommend owning life
One in four consumers in the U.S. isn’t insured. The reason? They don’t have any idea how much life insurance they need and where to get it. This is the 5th top reason why people don’t buy life insurance in the United States. It goes after the other popular reasons such as it being expensive
It’s not always easy to think about but it’s important to know about life insurance and suicide. The suicide of a loved one is difficult enough without the problem of a denied life insurance claim. In the aftermath of a death in the family, there is sadness, anger, and grief. Then there are the practical
If there’s one thing we know about people, it’s that they love to shop. But one thing most people dread purchasing is life insurance. There’s just something dismal about planning the financial aspects of your death. Then on the flip side, you want your family to be alright after you pass. With life insurance, you
Life insurance is one of the most important forms of investment someone can make. It essentially ensures the financial security of anyone who depends on you. This also makes it one of the most popular types of investments since most people want to be sure their loved ones are safe no matter the circumstances. Typically,
When you were a kid, you used to think that being an adult would be so cool. You could do whatever you want, when you want, and how you want. Usually, this meant things like having dessert before dinner (or even for dinner). What the adults tried to tell you was that, while yes you
Planning for your death is one of the toughest things to do. It’s a morbid and sensitive topic that can be difficult to talk about. Most people just don’t like to think about it. These are perfectly normal feelings to have. However, they will have consequences. Ignoring death’s reality can put a strain on your relatives when you die. Let’s
For many Americans, life insurance is something that they’ll buy “one day.” But unfortunately, 30% of American households still remain uninsured. If you’ve decided not to be in the 30%, congratulations! But purchasing insurance can be complicated. You may have noticed the A.M. best rating scale. But how does it work? This system makes it
Roughly 63% of Americans own a home. Your home is likely your largest – and your most valuable – investment. But if you pass away before you’ve paid off your mortgage, you could leave your family with the risk of losing the home. Did you know that about 26 percent of Americans do not have any emergency
Life insurance is important for a number of reasons. It ensures that your loved ones will be protected once you pass. This is particularly important if you have young children or people depending on your income to sustain their standard of living. You can also use life insurance to leave your kids an inheritance by
Life insurance is a wonderful way to protect your loved ones and give you peace of mind. Your life insurance provides money that can offset funeral costs and the sudden loss of income for your family. It can also help pay off any debts you may have left behind. Depending upon your family’s financial needs,
A recent survey by Bankrate found that while six out of every ten people may carry life insurance, almost half of them lack sufficient coverage to protect and provide for their family. When considering whether or not to purchase life insurance, or when deciding how much coverage to get, too many Americans consider only the
Research shows that financial instability is one of the leading concerns among Americans. In fact, data from a financial literacy survey conducted by the National Foundation for Credit Counseling (NFCC) and NerdWallet, showed that nearly 70 percent of all Americans are worried about their personal finances. Regardless of your age or where you are in
If you are a resident of Los Angeles, California in search for affordable life insurance coverage, or simply looking to improve your current rates, then you have come to one of the best online life insurance agencies on the internet. Top Quote Life Insurance provides instant online life insurance quotes for residents of Los Angeles,
What is universal life insurance? Universal life insurance is a form of permanent life insurance coverage. Out of all types of permanent life insurance coverage it is the most affordable, comes with a guaranteed fixed premium and provides a lifetime of insurance coverage. It’s not uncommon for someone looking to purchase a permanent life insurance
If you are a non U.S. citizen, foreign national or a non U.S. resident interested in purchasing a U.S. life insurance policy, Top Quote Life Insurance can help you. U.S. life insurance for foreign nationals and non U.S. residents is becoming increasingly popular due to the unique coverage options and very affordable premiums. Applying for
Most people are unaware of the option to purchase additional coverage for their life insurance coverage by utilizing policy riders. A life insurance policy rider is basically a form of supplemental coverage, in addition to the death benefit coverage. A life insurance policy in itself is a contract between you and the life insurance company.
The #1 determining factor when it comes to purchasing the most affordable life insurance coverage is you. The price you pay for affordable life insurance coverage is primarily based on your overall risk to the life insurance company. The less of a risk you are to the life insurance company having to pay out a
Preferred Plus, Preferred, Standard Plus, and Standard are all terms used when describing life insurance health classifications. Life insurance health classifications are used by life insurance companies to determine your risk of insurability. The less of a risk you are to the life insurance company, the better health classification you will qualify for. The life
When a life insurance policy is purchased, most people put it away for safekeeping and forget about it. After all, now that you purchased that brand new term or permanent policy, you’re covered so what’s the point of thinking about that policy after purchasing it? You may not understand the importance of an annual life
Interested in getting the best price for life insurance coverage? Of course, you are who isn’t! When it comes to purchasing life insurance our customers want to know how to get the best price for life insurance coverage. We put together a couple of simple tips that you can follow that will ultimately lead to
It can be a very overwhelming feeling when it comes to deciding what the best life insurance coverage is for you. With all the different coverage options how do you decide on one from another? This is a common concern to most people when they start their search for life insurance coverage. We want you
If you have been declined for life insurance coverage don’t panic, there may be a possibility of obtaining coverage. From time to time even Top Quote Life Insurance will run into a case where a client will be declined for life insurance coverage. All life insurance companies view risk differently so again don’t panic and
Quick NavigationU.S. Life Insurance Coverage for Non-U.S. CitizenAre you a candidate for U.S. Life Insurance?Who is considered a Non-U.S. Resident?Tax concerns facing residents and non-resident aliensFinding a solution with U.S. Life InsuranceU.S. Life Insurance PolicyCoverage Options AvailableApplication ProcessUnderwritingEligibilityRestrictions to CoverageHow to Apply for a U.S. Life Insurance Policy U.S. Life Insurance Coverage for Non-U.S. Citizen
Permanent Life Insurance Quotes Quick NavigationPermanent Life InsurancePermanent life insurance is not like the old universal life insurance policiesGet Quotes NowThe Problems with Older Universal Life Insurance PoliciesThe Guarantees That Come With (GUL) Permanent Life Insurance Policies The Benefits of Permanent Life InsuranceWho Should Consider a Permanent Life Insurance Policy?6 Easy Steps to Getting Permanent Life Insurance Quotes
Unless you are purchasing a life insurance policy that requires no medical exam, you will be required to take a life insurance medical exam to qualify for coverage. This exam is nothing to worry about and to be honest, is quick and simple. The reason you are required to take a medical exam for your life
Quick NavigationLife Insurance Terms & DefinitionsQuick Reference Guide of Life Insurance Term & Definitions Life Insurance Terms & Definitions At Top Quote Life Insurance we have made it our goal to making life insurance simple for our online consumers. A part of this goal was to create a helpful life insurance guide of commonly used life insurance
Quick NavigationHow much life insurance do I need?Which life insurance company should I choose?Are the insurance quotes and rates you calculate accurate?How long does it take to get life insurance?Who should get life insurance?How long will it take to be contacted by an insurance expert after I complete the form?Why should I use top quote life insurance?How long
Quick NavigationQuick & Easy Online Life Insurance Application ProcessNo Obligation Life Insurance QuotesLive Agent ConfirmationFree Medical ExamNo Hassle Application ProcessStatus Updates During the Underwriting ProcessYour Life Insurance Application has Been Approved! Quick & Easy Online Life Insurance Application Process At Top Quote Life Insurance we make the process of applying for life insurance simple. Below we
Since the original posting date of this article, there have been many changes in the life insurance industry. These changes reflect on the application process, exam process and even the overall time in which it can take to be approved for coverage. For example, many life insurance companies have now begun offering the option to
When it comes to purchasing life insurance many would believe it’s purchased primarily for the working spouse. A major factor when purchasing a life insurance policy is to replace lost income, but what about the stay at home spouse? Should life insurance coverage for stay at home parents be considered? Life insurance coverage for stay
Ready to Compare Life Insurance Rates?
It’s free, fast and super simple.