Why is Life Insurance valuable?

By providing money following a death, what your life insurance “does” is not complicated. But when your family or business either doesn’t have money or it is “tied-up”, life insurance becomes extremely valuable. Homes and businesses don’t need to be sold, there’s money for mortgages and groceries, taxes are paid, and the stress for those we leave behind is lessened. Life insurance is valuable because it offers efficient and reasonable solutions to these types of problems.

How much life insurance do I need?

Your “need” for life insurance is dictated by the financial situation you want for the family and/or business you leave behind. You love someone or you owe someone. Likely you want to make it so your loved ones are looked after and the debt and taxes you owe is covered. You can go one step further and ensure there is a substitute for the financial contributions you can no longer provide. Your need will fluctuate at different stages of life.

How will my need for Life Insurance change over time?

Life insurance needs generally start out as protection for your family and/or business from an unlikely yet costly young death. Usually large amounts of coverage are needed for debt repayment and income replacement purposes. Later in life there is more of a need for targeted planning for things like income taxes and other final expenses. Because of life’s continuous fluctuations it is important to be forward thinking in your needs planning.

What type of Life Insurance do I need?

There are different types for different circumstances. Most people will benefit from a mix.

Term life insurance is very affordable, but it expires. Term plans generally cover large amounts of debt and are used for income replacement purposes up until retirement age.

Whole Life and Universal life insurance are initially more costly than term. However, that is because they pay out no matter when you pass away which means premiums are never wasted. These plan types are typically used for well-defined final expenses such as income taxes and other estate planning purposes.

What we like to see is a combination of these coverages obtained at a younger age when premiums are most affordable.

Will I have to answer medical questions?

It depends. The older you are and/or the more coverage you want, the more questions you will likely need to answer. Some insurance companies offer coverage no questions asked, however these products are more expensive. The more evidence you provide to prove you are low risk, the more coverage you can get and the less you will pay. A standard life insurance application asks about your current and past medical situation and your family’s medical history.

Will I have to submit blood, urine or saliva?

As above, it depends on your age and the amount of coverage for which you are applying. However, the industry is moving away from this requirement except in cases of higher amounts of coverage. Someone 45 or younger can obtain 500K to 1MM without fluids depending on the insurance provider.

What is underwriting?

As above, it depends on your age and the amount of coverage for which you are applying. However, the industry is moving away from this requirement except in cases of higher amounts of coverage. Someone 45 or younger can obtain 500K to 1MM without fluids depending on the insurance provider.

Is the Life Insurance through my Group plan sufficient?

Likely not. There are two main reasons it is important to have coverage independent of your group plan.

• The coverage is not portable in the event you change employers or careers. The worse thing we see is people who become self employed or employed without group benefits who are no longer insurable.
• Group plan life insurance amounts range from 10K to 3 times annual income. Even if you are on the higher end of this range, it is usually not enough.