Florida Life Insurance
Do you need life insurance?
Get an insurance quoteFREE & ONLINE Get a response now!
Life Quote Tool
Life can be very complicated. People have possessions, bills, families, and responsibilities that many times require income. Life insurance provides benefits for the ultimate "what if" in life – the loss of a family member or loved one. As its very basic core, life insurance will pay a set dollar benefit upon the death of an individual. The sudden, often unexpected death of an individual can leave a family financially crippled with the loss of an income source. Life insurance provides for money to be paid to take care of these expenses, and maintain quality of life for the family.
Ask yourself these questions:
- Do you have a mortgage?
- Do others depend on your income to survive?
- Do you have any outstanding debts?
- Do you have any children and would your loss prevent them from going to college?
- If you died tomorrow, would your family be able to survive with the loss of your income?
- Do you want to leave behind a cash estate?
- Does your family have a history of heart problems or cancer?
If you answered "Yes" to any of these questions, you might want to look into getting an affordable life insurance plan. There are a million reasons to buy life insurance because your situation is never the exact same as someone else. That's why there are different levels of coverage, different types of life insurance, different terms (time limits), and different benefits.
What kinds of life insurance are available?
Term-Life Insurance
Term Insurance is the most popular and also most affordable type of life insurance on the market. It is also the most simple life insurance product available. The policy lasts for a pre-defined number of years (typically anywhere between 10 and 40 years), and pays a set death benefit (also called "face value", or "face amount") to a named beneficiary upon the death of the insured. That is the basic idea - also there are optional benefits and riders that can be added to a term life policy.
The following is a VERY basic example of the principles of a term life insurance policy. Actual coverage may vary.
Example: Carol is 50 years old and purchases a 20-year term life policy with a $250,000 death benefit and names her husband as the sole beneficiary. At age 67, Carol dies from an unexpected heart attack, leaving her husband behind. Since she passed away before her 20-year term policy expired, her husband can submit a claim and have the $250,000 death benefit paid out to him, since he is the named beneficiary.
Whole Life Insurance
Another type of life insurance plan is whole life insurance, provides protection for the "whole of life" - from the date of issue to the date of the insured's death provided premiums are paid. The benefit amount payable remains consistent throughout the policy's life, as well as the premium. In addition to being permanent, there are other features of a whole life insurance policy that set it apart from term: cash values and maturity at age 100. These two hallmarks of whole life provide "living benefits" to the policyowner. Because of these added benefits, whole life is more costly than term life insurance.
Unlike term, which only provides death protection, whole life combines insurance protection with a savings element. This savings, commonly called the policy's cash valuebuilds over time. This is because whole life policies are credited with a guaranteed interest rate, which is credited regularly and grows over time. The amount of the policy's cash value depends on things such as the face amount of the policy, the duration and size of premiums, and how long the policy has been in force.
Whole life is designed to pay out or "mature" at age 100 – this is the point where the cash value equals the face value of the policy. At this point, no more premiums are owed, and the policy is completely paid up. At this point, the life insurance company would pay out the face amount of the policy. Statistically, very few people live to age 100. It's far more likely that a whole life policy will be cashed in for its cash value or that the face amount will be paid in a death benefit prior to the insured reaching age 100.
The following is a VERY basic example of the principles of a whole life insurance policy. Actual coverage may vary.
Example: Robert is 30 years old and purchases a whole life policy with a $100,000 death benefit. Robert pays the same premium since age 30 and will get a guaranteed death benefit of $100,000 as long as premiums are paid until his death, or 100th birthday. However, at any time, Robert can decide to cash in his whole life policy and take a payment of the current cash value of the plan, effectively ending the policy.
Universal Life Insurance
There is a variation to whole life called Universal Life Insurance, distinguished by having greater flexibility. Whole life has fixed premiums, fixed face amounts, and fixed cash value accumulations. Universal life allows policyowners to choose the amount and frequency of premium payments, as well as adjust the face value up or down depending on needs. The interesting part is that no new policy needs to be issued when these changes take place. Eventually, the cash value can even take over for the premium payments in a universal life insurance policy.
Get an insurance quoteFREE & ONLINE Get a response now!
Life Quote Tool
Read Group Read Dental