If you died tomorrow, how would your family pay for your funeral and burial costs, outstanding medical bills, and any other outstanding debts? How would they pay for their own ongoing living expenses such as food, utilities, and a mortgage?
Life insurance is a safe, simple way to guarantee that the people who depend on you now will be taken care of after you're gone. Beneficiaries receive a tax-free cash payment that ensures their standard of living and way of life does not suffer. Please, don’t make a tragic situation even worse by failing to plan now. If you are the primary earner in your household, life insurance is not an option. It's a responsibility.
Contact your Hearthstone Insurance Group LLC agent to discuss your life insurance options today.
How Do I Know How Much Coverage I Need?
There is no "one size fits all" policy that is right for everyone, because no two people have exactly the same needs. An elderly widow who only wishes to pay for her own burial expenses would require a much different policy than a 40 year old who is the primary earner in a family with children.
While experts disagree on the exact formula for income replacement, most estimate that, at a minimum, a person needs coverage equal to six times their annual income. Ultimately, the only "wrong" answer is no coverage at all.
Contact your Hearthstone Insurance Group LLC agent today, and they can assist you with balancing future needs with your current financial capabilities.
What's The Difference Between Term And Permanent Life Insurance Coverage?
Term Life insurance is the most affordable type of life insurance, because it only provides coverage for a limited period of time. Policies vary, though, and can range from five years up to thirty years. As long as the policyholder dies within the time period specified in his or her policy, the insurer is obligated to pay the benefits in full.
The risk with buying term life insurance is that the policyholder may "outlive" the coverage. When this happens, the policy terminates, and you are given the option to renew. However, the new premiums will most certainly be higher, because you have aged. Still, term life insurance is an attractive option for many people, because it allows them to buy coverage at a lower cost and when it's needed most.
Permanent life insurance, on the other hand, offers lifetime protection as long as you continue to pay your premiums. All age groups can take advantage of the security and peace of mind that permanent life insurance offers. Retirees can guarantee that their loved ones will be provided for after they are gone, and young people looking to start a family can take advantage by buying early and locking in a great, low rate.
In some instances, a combination of both term life and permanent coverage is desirable. Contact your Hearthstone Insurance Group LLC agent today to determine which solution is best for you.
Can I Use Life Insurance While I'm Living?
While the primary reason for purchasing life insurance is to provide financial security for your loved ones after your death, many policies offer benefits that can be used by the policyholder during their lifetime.
Accelerated Death Benefit
Terminally ill patients can forgo their death benefit in exchange for a payment equal to the life insurance policy's face value.
Take advantage of group rates and the convenience of direct billing by taking your life insurance plan with you when you retire or switch careers.
Waiver Of Premium
This feature allows you keep your coverage even if you become seriously ill or disabled and are unable to pay your premiums.
By paying in excess of your regular premiums, some policies allow you to increase the amount of your death benefit. Likewise, cash accumulation can also be used to increase the loan amount available to policyholders while they are living.
Can I Borrow Money Against My Life Insurance Policy?
The ability to borrow money is one of the biggest differences between term life and permanent life insurance. Only permanent insurance allows the policyholder to take out a loan against the cash value built up in the policy. Policyholders are required to repay this loan including interest, and any outstanding balances owed at the time of death will be deducted from the death benefit.
Term life insurance policies, on the other hand, do not have a loan option available, because they do not accrue cash value. This is why these types of policies are commonly referred to as "Death Benefit Only" policies.
Can The Same Person Have More Than One Life Insurance Policy?
Currently, there are no laws restricting the number of life insurance policies one person can hold. Individuals are also allowed to purchase policies from as many different companies as they want. Frequently, a person will purchase an individual life insurance policy to supplement the one they receive through their employer. No policy cancels another policy out, and all effective policies will be paid concurrently at the time of death.
What Should I Consider In Naming My Beneficiaries?
Who you choose as your beneficiaries is one of the most important decisions a policyholder makes. You will have the option to designate one primary beneficiary or multiple ones. If multiple beneficiaries are designated, you will need to decide how the death benefit is allocated between them. Beneficiaries are not required to be actual people. Legal entities such as foundations, charities, or trusts can are also eligible.
As a precautionary measure, you will also need to designate "contingent" or secondary beneficiaries in the event that you outlive your primary beneficiaries. You should take the time to review your beneficiaries annually as they can be changed throughout the life of the policy for any reason.
If you have additional questions regarding the process of choosing your beneficiaries, please contact your agent and they will be happy to assist you.
Is A Physical Exam Always Required To Obtain Life Insurance?
Not all life insurance policies require a physical examination. However, policies that pay a high death benefit usually do. This physical is typically performed in your home by a paramedic or licensed health care worker. Most exams consist of a height and weight check, blood and urine samples, and an EKG. You will also need to be prepared to answer questions relating to your medical history. In some instances, additional documentation such as a credit history and even your driving record is required.