What is life insurance?

life insurance
life insurance
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Protect your loved ones when the unexpected may happen.

It is never too early to plan.

What is life insurance?

Simply put, life insurance is a legal contract between a policy holder and an insurance company, where the company agrees to pay out a stated amount to a beneficiary in the event of the policy holder’s death.

A life insurance contract outlines how much money the insurance company will pay out to your loved ones upon your death, how much you will pay each month as a premium, and the period of time the insurance policy will cover you. The more years you want the insurance to cover you and the more money your loved ones get, the higher your premiums will be.

Life insurance comes in varying forms including whole life and term life. To get information on the difference between the two, see term life vs. whole life insurance.

Who needs life insurance?

Whether you are just starting out or planning for retirement, every individual should take the time to think about what would happen to their loved ones if they died. Would their spouse have enough money to pay off family debts and loans? Would their children be able to afford college? If the answer is “no” then life insurance is the key to your family’s future financial security.

When thinking about how much life insurance you need, take stock of your existing financial obligations to calculate the amount it would take to pay off these debts. Everyone should have enough insurance to cover funeral expenses, outstanding mortgage payments, credit cards, and car loans, with enough remaining to provide a comfortable income for your spouse and four years of tuition for each child.

Term life insurance is a great solution for young families, new homeowners, or people who have other outstanding financial obligations because it offers the lowest premiums with the biggest payout during your coverage period. It is the simplest type of life insurance on the market, providing coverage for a specified period and offering death benefits only, and is designed to carry you through key life events when you and your family need the most protection at an affordable price.

Frequently Asked Questions

What are the advantages of term life insurance? Compared to whole life insurance, term life insurance is a more affordable option offering lower premium payments and higher benefits in the event of death within the period specified in your policy. It is designed to provide coverage for temporary needs such as paying off a mortgage, paying for a child’s tuition, or paying off outstanding debts and loans, and offers purchasers peace of mind knowing that their families will be protected in the event of their death. These policies provide customers with flexibility of choosing their ideal coverage period, generally anywhere between one and 30 years, as well as the amount of coverage they wish to purchase with their policy.

Who can apply for term life insurance coverage? Anyone over age 18 looking to purchase affordable coverage for a set period of time can apply for term life insurance.

How do I calculate how much term life insurance I need? Before purchasing a term life insurance policy, the buyer should take the time to calculate up all of their outstanding debts, along with how much it would take to provide their spouse with a comfortable income and children with enough money to pay for their future education. Once you have this figure in mind, you can purchase a policy with benefits that will properly provide for your family’s future.

Is term life insurance affordable? Term life insurance offers some of the most reasonable rates on the market, and is the ideal choice for anyone looking for low premiums and competitive benefits. Often recommended to families with children, term life insurance provides affordable protection so you can continue to build your savings at the same time.

What coverage does term life insurance provide? Term life insurance provides protection during a set period of time, generally a term anywhere between one and 30 years. When choosing a term life insurance policy, you will get to select the amount of coverage to carry, and your premium will be higher or lower based upon the benefits you select. The standard policy pays out in the event of death at any time during the coverage period, anywhere, from any cause (with the exception of death by suicide, occurring within the first years of coverage).

Who can be named as a beneficiary of my policy? Insurance agencies allow policy holders to name beneficiaries who are financially dependent, or have a financial interest in you. Spouses, children, or any other adults that you support or owe money to, can be named as beneficiaries of your policy. However, friends, relatives, and acquaintances without financial ties to you cannot be considered as beneficiaries. In some cases, you are allowed to name a charity as a recipient of your benefits if you have a documented history of giving to it in the past.

Can I reduce or increase my term life insurance coverage? Yes, you can make changes to your policy at any time to reduce or increase your coverage. Your agent is trained to help you select the best policy for your current situation, and can offer assistance in calculating how much coverage you need at any stage of life.

Why choose My Insurance Expert? Over the past three decades My Insurance Expert has built a solid reputation for quality customer service and superior products, while remaining on the cutting-edge of industry innovation. Here, we aim to keep your shopping experience simple and stress-free, offering expert customer care and agents who will walk you step-by-step through the application and purchasing process. MIE provides visitors with instant access to individual quotes from the top insurance providers nationwide, and one-on-one support, guidance, and information from start to finish.

What ING life insurance plans are available? My Insurance Expert is pleased to announce its partnership with ING Financial Services, now offering ING’s term life insurance policies. ING offers a selection of highly competitive term life insurance products, including some with conversion options to universal and variable life insurance policies.

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