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What Are The Benefits Of Life Insurance

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Drawbacks Of Buying Life Insurance

General benefits of life insurance

As we mentioned earlier, life insurance has many benefits and very few drawbacks. But we like to be transparent and give our readers all the information. The drawbacks to owning life insurance are:

  • If old or unhealthy, life insurance can be expensive
  • Whole life insurance is expensive at all ages
  • The investments in the cash value of permanent life insurance can be weak
  • Easy to mislead, or worse lied to, if you dont work with a reputable life insurance agent

Does All Life Insurance Have Living Benefits

As folks live longer, there are more scenarios where living benefits riders may be an attractive option. You may develop a terminal illness or permanent disability and need money to pay for your medical expenses. But unfortunately, not every life insurance policy automatically includes living benefits. While some life insurance policies may have built-in living benefits without paying extra, other life insurance policies may require an extra fee to add living benefits riders.

What Are The Life Insurance Options For Seniors

It depends on your needs. Life insurance generally gets more expensive with age, so many seniors get policies with just enough coverage to provide for funeral expenses to avoid burdening their family. Life insurance can also be used for estate planning strategies, where it can be a tax-advantaged way to leave assets to heirs.

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Reasons Why Life Insurance Is A Crucial Plan

  • It prevents the loan burden as it is safe and all your loans can be repaid without the risk of your family losing an asset.
  • You will avail of annual tax deductions.
  • With annuity-based life insurance, you can plan a secured and safe retirement.
  • You can secure your childs future and you can give them the future you want just by life insurance plans.
  • Financial protection in case of sudden illness or health issues.

Life Insurance For Orp And Mcrp Members Housestaff And Postdoctoral Fellows

Benefit Life Insurance

ORP and MCRP members, as well as Housestaff, are enrolled in Group Term Life Insurance with Accidental Death & Dismemberment through The Standard. ORP and MCRP members, as well as Housestaff, can secure additional life insurance by purchasing Supplemental Life with Accidental Death & Dismemberment.

  • If you have questions, contact The Standard at 1.800.843.7979.

    The following resources have detailed information:

  • Equivalent to your annual salary in group life insurance
  • Accidental Death and Dismemberment
  • Identity theft protection
  • Salaried, benefits eligible employees may purchase supplemental life. See additional information about this benefit below.

    Features include the following:

  • Your coverageBuy additional coverage in multiples of salary, increments of 1x, 2x, 3x, or 4x, up to the $500,000 maximum, with evidence of insurability required over 3x salary
  • Spouse coverageIncrements of $25,000 up to a maximum of $100,000 , with evidence of insurability required for requests over $50,000. Please note you cannot cover a spouse who is also a benefitted employee of UVA.
  • Dependents$10,000 up to age 26 at a rate of .120 per $1,000 of coverage, or $1.20/month
  • Employee/Spouse Monthly Rate Variations

    AgeRate per $1,000 in coverageReduction based on age

    If you are in the Virginia Retirement System and have Basic Life insurance with Minnesota Life, your insurance continues after you retire at no cost to you if you meet both of the following requirements:

  • You are at least 55 years old
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    The Nuts And Bolts: Who Assumes The Risk

    A life insurance policy has three sections: the cost of insurance, the operating expense of the company, and the return generated from the collected premiums.

    Term insurance is the cheapest insurance .

    Term insurance is insurance for a period of your life, often 25-60, and has no cash value. Despite its popularity, about 88% of consumers dont receive benefits, because the policy is in force when the risk of dying is at its lowest.

    Prices spike at age 60 because the likelihood of death is much more significant. Term insurance works best in conjunction with whole life insurance, to provide full coverage and peace of mind.

    Unlike Term, Whole Life Insurance includes a cash value.

    Term insurance is cheap because the companies bear almost no risk. Whole life insurance, on the other hand, is guaranteed to payout. Therefore, the company assumes all the risks. And the opportunities afforded by the cash value, which eventually exceeds premiums paid, are priceless.

    Things To Consider For Life Insurance

    • Gives them clearer information Your medical history and all your personal data must be presented clearly to the insurance company and dont try to hide information when filling out the insurance application form. Missing information can lead to cause problems while claiming for insurance.
    • Read term-conditions While filling the insurance form you can read all the terms and conditions carefully. Make sure to read it and completely understand the information before purchasing an insurance policy of your choice.
    • Research As there are many policies. You have to research each and every policy so you can get more benefits once your policy will mature.
    • Consider premium payment Many insurance policies provide premium payment options like annual, semi-annual, or on a monthly basis. Moreover, you can choose from a schedule that will allow you to make a premium payment.
    • Lock-in period After buying an insurance policy, some people are not happy with that so in case the insurance policy gives you the frame time of 15 days in which you can return the policy to the insurer.

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    What Exactly Is Life Insurance

    Life insurance is a contract between a policyholder and an insurance company where the insurer promises to pay a sum of money in exchange for a premium. In many policies, you are paid an amount called maturity benefit at the end of the policy term. Many people take universal life insurance for college education, credit cards and to compensate for estate taxes.

    Variable life insurance is much life insurance with an investment component and provides you with cash surrender value as of underwriting.

    In case you arent happy with your purchase, you can cancel your policy.

    Voluntary Term Life Insurance

    The Living Benefits of Cash Value Life Insurance

    If you qualify, you can buy additional Voluntary Term Life Insurance. Enrollment is not automatic. You must apply for this coverage. This coverage is available regardless of whether you or your dependents enroll in health coverage. Your spouse may also apply for enrollment in this coverage even if you do not enroll. A child term rider may be added to your certificate or to your spouses certificate, but not to both. If your spouse is also a state employee, your spouse must apply for coverage as an employee, not as your spouse.

    If you are currently enrolled and eligible for a guaranteed issue increase, information will be mailed to you prior to the start of the annual enrollment period. If not currently enrolled, you will be required to present evidence of insurability by answering health-related questions. A child term life insurance rider may be added to your certificate or your spouses certificate without answering any health-related questions for the child.

    Portability

    Summary

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    Find The Best Life Insurance Policy For You

    Although it may seem like you need to choose between whole or other kinds of life insurance, the truth is that many financial plans typically include a mix of multiple kinds of policies, perhaps term and whole life insurance. This can give you more flexibility to prepare for any of lifeâs many possibilities. A financial professional can help you find the right mix of insurance and show you how it fits into your overall financial plan.

    1Accessing your cash value will reduce your death benefit and may affect other aspects of your plan.

    2Dividends are not guaranteed.

    3Loans taken against a life insurance policy can have adverse effects if not managed properly. Policy loans and automatic premium loans, including any accrued interest, must be repaid in cash or from policy values upon policy termination or the death of the insured. Repayment of loans from policy values can potentially trigger a significant tax liability and there may be little or no cash value remaining in the policy to pay the tax. If loans equal or exceed the cash value, the policy will terminate if additional cash payments are not made. Policyowners should consult with their tax advisors about the potential impact of their policy loans.

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    Benefits Of Life Insurance

    by Frankenmuth Insurance | Sep 9, 2021 | Life Insurance

    Most Americans will agree that getting life insurance is a good idea but only 54% actually have a life insurance policy. Of that 54%, 27% have a group policy usually through their employers which doesnt provide adequate coverage in most cases.

    The good news: Its surprisingly affordable to provide your family members with the financial protection they need. And doing so provides a host of benefits, including some that many people arent aware of.

  • You can support your family. Did you know that four in 10 households without life insurance would have difficulty paying for living expenses if the their primary household earners passed away? Having an adequate life insurance policy gives you and your loved ones peace of mind knowing your family has the financial means to pay for daily living expenses and future costs, like college tuition for your children.
  • Your family can pay for final expenses. Even if your children are independent adults, funeral and burial costs could be a financial hardship. The average funeral and burial costs $7,640 in the United States.
  • Life insurance benefits are tax-free. Life insurance payouts are not considered income for tax purposes, so your family will get the money they need without a tax burden.
  • Ready to get started? Use our Life Insurance Calculator to estimate how much life insurance you need, or talk to one of our local, independent agents today.

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    How Long Does My Life Insurance Plan Last

    Your life insurance plan’s validity is based on the following. On the occurrence of these events, your life insurance is used up.

    – When you have surpassed the term of your policy

    – When you die during the policy and your family gets the claims

    *In case if you have opted for the premium funding benefit, the investment part of your policy will continue even after death.

    Naming Your Estate As The Beneficiary

    Benefits of Life Insurance

    If you name your estate as the beneficiary. The estate will distribute the death benefits according to the terms of your will. The proceeds of the death benefit will become part of your estate and will be subject to estate taxes. If the death benefit is part of your estate, creditors may claim the death benefit to pay for your outstanding debts.

    If you name your estate as your beneficiary:

    • the death benefit will become part of your estate
    • the death benefit will be distributed according to the terms of your will
    • the money will be subject to taxes when your estate is settled

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    Buy The Amount Of Term Life Insurance Needed And Invest The Rest

    While permanent life insurance fits some people, most consumers will see the benefits of life insurance more from buying term and investing the rest. The biggest reason term life is so popular is the cost of premiums. You can get a lot of death benefit with term life insurance for very little premium.

    With a term life insurance policy and proper planning, you can protect your loved ones throughout your income producing years, while making contributions to your retirement accounts at the same time. This makes you financially secure whether you live or die.

    Life Insurance Provides Cash When You Need It Most

    Your life insurance policy can deliver a specified sum of money when you need it. Upon your death, your family will receive your policy payout immediately. And that death benefit is generally not subject to federal income taxes. For example, a $500,000 policy provides $500,000 in death benefit proceeds directly to your beneficiary.

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    Whole Life Insurance Builds Cash Value

    Cash value is one of the key living benefits of whole life insurance. A portion of every premium payment you make is added to your policyâs cash value, which accumulates slower in the early years of the policy. That becomes money that you can access at any time for any reason.1 Since itâs guaranteed never to go down, it can become an important, stable part of your financial plan.

    It Can Help To Financially Protect Your Family

    Explore VA benefits: Overview of life insurance and how to apply

    Life insurance is meant to help protect your family’s financial future. Even if you have savings, it’s unlikely that it would be enough to cover your family’s expenses for several years or even decades if something happens to you unexpectedly. Typically, there are three types of life insurance to consider: term life, whole life or universal life.

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    What Is Cash Value Insurance

    The cash value component is perhaps one of the greatest benefits to a whole life insurance policy, because it provides a place to store cash that is liquid and guaranteed to increase. While term life insurance can create peace of mind, it doesnt have a cash component.

    The cash value of a life insurance policy is not only an emergency fund, its a fund for opportunities. Policy loans, can help you fund a new business venture, make an investment, or support a loss of income. The sooner you begin a policy, the sooner you can have that peace of mind.

    We Have More Financial Concerns Than We Used To

    The range of expenses is always growing. At one time, there were fewer: rent/mortgage, council tax, utilities, phone line and TV licence. But now, many of us have contracted payments to TV package providers, broadband providers, mobile phone companies and other subscription services.

    Thats before factoring in things like owning a car. While its arguable that these are choices rather than obligations, very few of us would be able to live without them.

    Naturally, we commit to these purchases because we dont imagine that we will die. But if the worst should happen, would your loved ones have the advantage of being able to maintain these payments? One of the benefits of life insurance is that it could help your loved ones with these expenses.

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    Basic Group Term Life And Accidental Death & Dismemberment Insurance

    The state provides all benefits-eligible employees with basic term life Insurance and basic accidental death & dismemberment insurance automatically, at no cost.

    If you enroll in health insurance as the head of contract, or HOC your life insurance coverage automatically increases based on your salary to a maximum of $50,000 for basic term life insurance and $100,000 for basic accidental death & dismemberment insurance. You pay a monthly premium for this additional coverage.

    • The premiums for coverage above the amounts provided by the state are deducted from your paycheck.
    • If your salary goes up as of Sept. 1, 2022, compared to Sept. 1, 2021, your monthly premium may increase as of Oct. 2022.
    • At ages 65 and over, your coverage amounts will reduce.
    • Dependents enrolled in health insurance have $3,000 of basic term life insurance. Dependents enrolled in health insurance also have basic AD& D insurance and the amounts are based on your salary and family composition. You will pay monthly premiums for your dependent coverage.
    • Basic dependent term life insurance has three coverage levels available: employee + spouse, employee + child or employee + spouse + child.
    • LifeSuite Services, a value-added benefit, is included at no additional charge. Services and resources include:
    • Travel Assistance Services
    • Legacy Planning Services
    • Beneficiary Financial Counseling

    Reasons Why Life Insurance Is Important

    Life Insurance Long Term Benefits
  • It Can Help to Pay for Future Education Expenses
  • Whether you’re married with kids, or have a partner or other relatives who depend on you financially, having life insurance can be important. Life insurance provides money, or what’s known as a death benefit, to your chosen beneficiary after you die. It can help give your loved ones access to money when they need it.

    Understanding life insurance can help you plan for your family’s long-term financial needs. Here are five reasons why life insurance is important.

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    It Can Help Your Loved Ones Pay Off Debt

    Certain types of debt don’t go away when you die, which means your loved ones may have to use money from your estate or sell off other assets to cover them. This could leave less money to pay for expenses.

    Life insurance can help your loved ones pay for any debt you leave behind, including credit card debt, business debt, personal and/or educational loans and mortgage debt. At a time when your loved ones are already dealing with your loss, life insurance can help ease some of the financial burdens they may experience after your passing.

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    Protection For Business Owners

    Even business owners can protect their businesses with whole life insurance. In the event of the insureds death or disability, employees can receive payment if the policy includes buy/sell agreements or a key person as stipulated in their policy.

    With these policies, the other owner or higher up in a business acts as the beneficiary. As a business owner, having a whole life insurance policy can also help you support your business in the event you become disabled. You can setup a policy so that if you become unable to work, you can get early access to capital to support your business.

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    Why Should I Buy Life Insurance

      Many financial experts consider life insurance to be the cornerstone of sound financial planning. It can be an important tool in the following situations:

    • Replace income for dependents. If people depend on your income, life insurance can replace that income for them if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, siblings or adult children who continue to rely on you financially. Insurance to replace your income can be especially useful if the government- or employer-sponsored benefits of your surviving spouse or domestic partner will be reduced after your death
    • Pay final expenses. Life insurance can pay your funeral and burial costs, probate and other estate administration costs, debts and medical expenses not covered by health insurance.
    • Create an inheritance for your heirs. Even if you have no other assets to pass to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries.
    • Make significant charitable contributions. By making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policys premiums.
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