Affordable Life Insurance Protection for Your Family
What is the Meaning of Life Insurance Coverage?
Life insurance is a written contract between an insurance carrier and a policy owner.
A life insurance policy guarantees the life insurer pays out a sum of money to the named beneficiaries of a policy when the insured person dies, in exchange for the premiums paid by the policyholder to the insurer during the insured’s lifetime.
Term Life Insurance: Provides full risk coverage against any type of eventuality for the duration of the policy term.
Whole Life Insurance: Offers life insurance coverage till 100 years of age.
Money-Back Insurance Policy: Provides life insurance with a return of premiums if the insured outlives the policy term.
Term life insurance is one of the two common forms of life insurance and is going to be what people think of as the easy-to-understand type of life insurance policy.
The way term life insurance works is that you pay a set monthly premium (eg. $25.00 per month), for a specific amount of insurance coverage (eg. $150,000), for a set period or term length (eg. 15 years).
If you are alive when the policy term expires in 15 years, the insurance coverage will end, or you can renew it on an annually renewable basis at which time your premiums can increase with each renewal.
If you pass away before the end of the policy term, 100% of the coverage (or death benefit) will pay out to your beneficiaries, subject tp the terms, conditions and exclusions stated in the life insurance contract.
Term life insurance premiums (prices) are usually much more affordable than permanent life insurance policies.
The other common type of life insurance is whole life insurance.
Whole life is a type of permanent life insurance, and it will last for your entire lifetime.
Unlike a term life policy, which only provides a death benefit, you can also build up cash value inside a whole life policy.
When you make monthly premium payments into your policy, a portion of those payments go towards building up cash value inside your policy.
With this cash, you can use it to help pay future monthly premiums due, or to take a loan in case of an emergency.
The way whole life insurance works is that you pay a set monthly premium (like $50.00 per month), for a specific amount of coverage (Like $40,000), for your entire life.
When you pass away, the death benefit will pay out 100%, and if you have allowed your cash value to build, that will pay out in addition to your life insurance policy death benefit.
No health examination life insurance can be either a term life or permanent life policy.
These insurance policies will not require you to take a physical exam to be approved for coverage.
While these policies won’t require an exam, they still go through the remainder of the underwriting process, including questions about your medical history, and your family health history.
In addition, they will request and review your medical records, perform telephone interviews, and this process may take a few weeks for you to get approval.
However, some No exam policies may offer you instant approval and immediate coevrage if you qualify.
Those policies are known as Simplified Issue No Exam life insurance policies.
Simplified issue life is usually a form of term life coverage that allows you to get approved for life insurance almost immediately, in as little as 10-15 minutes, or the same-day you apply for a policy.
These policies are often called No Exam policies; however, they go a bit further with eliminating certain things from the underwriting process.
With a Simplified Life policy, along with no doctor’s check-up, you may avoid a telephone interview, medical records, and a lengthy application process to get insured.
Insurance carriers access your personal data from several companies to make an instant decision on your insurability for life insurance.
The leading companies used to access the necessary information include the Medical Information Bureau (MIB), Intelliscript for your prescription drug history, and your Motor Vehicle Record (MVR) to check your driving history.
A simplified issue life insurance policy can offer you up to $2,000,000 of term insurance coverage in as little as 20 minutes.
Accidental death insurance is a kind of life insurance plan that will only pay out if you pass away from a covered type of accidental death.
This type of life insurance does not require you to go through underwriting or take a health exam, it is a form of guaranteed approval coverage.
The way an accidental death policy works is that you pay a monthly premium (like $5.00 per month), for a specific amount of life insurance coverage (like $100,000), until you reach a certain age (Usually 65).
If a person passes away from anything other than an accident, the policy does not pay out any death benefits.
You can purchase an accidental death policy separately as an individual life insurance policy, or as a rider added to a term life policy.
If you buy accidental death insurance as a rider on a term policy, it will pay out in addition to your life insurance death benefit if you pass away as a result of an accident.
So, if you have a $250,000 term policy with a $250,000 accidental death insurance rider and you die from an accident, the policy will pay out $500,000. If you pass away from a heart attack; however, the policy would only pay out $250,000.
These two types of insurance policies are precisely the same, they just go by two different names.
Final Expense and Burial Insurance are both types of whole life policies that provide life insurance for people between the ages of 45 to 85.
These policies usually don’t provide more than a maximum of $25,000 in death benefit coverage and offer guaranteed approval.
The idea is to use this type of life insurance policy to pay for your final expenses or burial and funeral costs.
A guaranteed issue life insurance policy is any form of life insurance plan that doesn’t require you to answer any health questions in order to get approved for your insurance policy.
This type of life insurance can be term and permanent coverage. However, you will see a guaranteed issue policy more geared towards seniors as whole life policies or for people who need high risk life insurance protection.
A guaranteed issue policy is usually the last option available if you can’t get approved for traditional life insurance or a final expense policy.
Always ask how long the waiting period is if you decide to get this type of policy. If you pass away before the waiting period, the policy will only pay out the premiums you paid into it plus a few percentage points. This is referred to as a graded benefit life insurance policy.
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