John R Bland
Address: Indianapolis, Indiana
Hours: Mon-Sat 8am – 7pm
Phone: 317-679-8935
Email: jrbland@sbcglobal.net
Life Insurance
The longer you put off buying life insurance, the more you risk paying significantly higher rates. If an accident or illness hits before you purchase a policy, what was an affordable plan can become financially out of reach.
Term Life Insurance
I can assist you in securing a term life policy that can help provide for your family’s loss of income if you die. This policy could help pay off a mortgage or fund a college education.
Whole Life Insurance
If you want to access a guaranteed cash value account, you want a whole life policy. You’ll also get guaranteed level premiums and life insurance protection for as long as you live.
Final Expense Insurance
Gain peace of mind with an affordable way for your family to pay your funeral costs and other final expenses or outstanding debts.
There are pros and cons for every type of life insurance plan. I can be a valuable resource to help you determine which policy type is best suited for your family’s needs and budget.
There are many things to consider when it comes to getting a life insurance policy that can help protect your family’s future financial needs. Below is life insurance guide can help make it easier to understand the basics about how life insurance works, types of coverage available, why you need it, and how to go about choosing a plan that’s right for you.
What is Life Insurance and How Does it Work?
Life insurance is a contract between you and an insurance company to provide you with coverage based upon your timely payment of premiums. Life insurance provides a death benefit to your named beneficiary (usually a spouse) upon your death. When you pass away, your beneficiary files a claim with the insurance company to submit proof (a death certificate) of your passing. If there is an agent who usually works with your family, your beneficiary can contact the agent who will help him or her complete the necessary paperwork. Or, your beneficiary can contact the insurance company directly and a claims representative will instruct him or her on what to do. After the insurance company receives all the documents, then your beneficiary will be issued the death benefit payout.
If you name a child as your beneficiary, then a custodian of the policy would have to file the claim. This could be someone who you named to manage the money from the policy in case you died while your child is still a minor. If you didn’t name anyone, then a court will appoint someone.
Main Types of Life Insurance
Life insurance can either be temporary or permanent. Temporary insurance is more commonly called term insurance, and policies are issued for a specific number of years, often from 5 to 30. Permanent insurance covers you for your entire life or up to a certain age, usually 100-years-old.
Some of the life insurance basics you need to know are the main differences between term and permanent life insurance.
| Term Insurance | Permanent Insurance |
| Pays a death benefit to your beneficiary only if you die during the term of an active policy until age 95 | Pays a death benefit to your beneficiary regardless of when you die as long as the policy is in force |
| In most cases, death benefit and the right to convert to a permanent policy without proof of insurability are the primary features | Includes both a death benefit and a savings feature |
| Policy has no value at the end of the term | Policy builds cash or loan value you can borrow against, withdraw, or invest |
Types of Term and Permanent Insurance
Practically all term insurance policies sold to individual consumers are level premium term policies. This type of policy guarantees that your premium will stay the same for a set period of time, which could be the entire term or just a portion. Other less common types of term insurance include annual renewable term and decreasing term coverage. The majority of insurance companies don’t offer these plans to individual insurance shoppers because they are generally not the best fit for families looking for the most protection.
Two of the most popular types of permanent insurance are whole life and universal life. Most whole life policies provide a level premium, so the rate that you pay stays the same for the entire policy. With most life insurance policies, you can get a larger death benefit by passing a medical exam. Other permanent insurance policies available include variable life and variable-universal life.
How Life Insurance Policies Are Issued
Policies are either simplified issue or fully underwritten. Simplified issue policies only require that you answer questions about your health when completing the insurance application. These policies may cost more since the insurance company has less proof about your health. Fully underwritten policies require that you take a medical exam and complete lab work. You usually get a lower premium with these policies if your results show good health.
Factors That Determine Your Premium Rate
A general rule of thumb with life insurance is that the younger and healthier you are, the less you will pay. Age is typically the most important factor in calculating your premium rate. Other factors include:
- Gender—females typically get lower rates because of longer life expectancy
- Answers to health questions on the policy application
- Results from medical exam and lab work
- Family medical history
- Marital status
- Location
- Lifestyle—smoker/nonsmoker, alcohol consumption, risky hobbies like skydiving
Why Do I Need Life Insurance?
There are three main reasons why many Americans get life insurance:
- To pay for burial and final expenses:even a simple funeral can cost thousands of dollars. The National Funeral Directors Association reports that the median price Americans pay for a funeral is $7,181, as of 2014. When you include the price of a vault, something that most cemeteries require, this comes out to a median price of $8,508. About 51% of Americans get life insurance for this reason, according to LIMRA.
- To replace income:if you died leaving behind a spouse and young children, it may be hard for them to make ends meet without your income. Money from a life insurance policy can help maintain your family’s standard of living and pay for expenses that go along with raising children. LIMRA reports that 34% of American households get life insurance for this reason.
- To pay off a mortgage:a large part of your working adult life is dedicated to paying off the mortgage on your house, which can take 30 or more years. Life insurance can help ease the financial burden your family may face to keep a roof over their head after you’re gone. Money from a policy can help them continue to make monthly payments or pay off the entire balance. LIMRA states that 26% of Americans get life insurance for this reason.