Life insurance is a contract between an individual (the policyholder) and an insurance company. In exchange for regular premium payments, the insurance company provides a lump-sum payment to the policyholder’s beneficiaries upon the policyholder’s death as well as payments in the event of a chronic, critical, or terminal illness.
Life insurance provides financial protection for your loved ones in case of your untimely passing. It can help cover expenses like funeral costs, outstanding debts, mortgage payments, and provide financial support and security to your family in difficult times.
There are several types of life insurance, including term life insurance, whole life insurance, and universal life insurance. Each type has unique features, benefits, and costs.
Term life insurance provides coverage for a specific period, typically 10, 15, 20, or 30 years. If the policyholder passes away during this term, the beneficiaries receive the death benefit. If the policyholder survives the term, the coverage ends. Return of Premium (ROP) is a feature offered in certain types of term life insurance. It provides a refund of the premiums paid by the policyholder over the term of the policy if the policyholder outlives the term of the policy.
Whole life insurance provides lifelong coverage and includes an investment component. It builds cash value over time, which you can borrow against or withdraw. Premiums are generally higher compared to term life insurance.
Universal life insurance is a flexible policy that combines a death benefit with a savings component. It allows you to adjust the premium and death benefit over time. The cash value can grow at a variable or fixed interest rate.
Accelerated Death Benefit (ADB): This allows the policyholder to receive a portion of the death benefit if they are diagnosed with a qualifying terminal illness. It provides financial assistance to cover medical expenses and other costs associated with end-of-life care.
Critical Illness Benefit: This provides a lump-sum payment if the policyholder is diagnosed with a covered critical illness such as cancer, heart attack, stroke, or other severe medical conditions. The funds can be used for medical treatments, home modifications, or any other expenses related to the illness.
Chronic Illness Benefit: This benefit is designed for policyholders who are unable to perform basic activities of daily living due to a chronic illness. It provides regular payouts to cover costs associated with long-term care, such as nursing home expenses or in-home care.
Long-Term Care Rider: This allows the policyholder to use a portion of the death benefit to cover long-term care expenses, including nursing home care, assisted living, and in-home care. It helps address the costs associated with aging or chronic health conditions.
Waiver of Premium: While not a traditional living benefit, this provision waives the policyholder’s premium payments if they become disabled and are unable to work. The policy remains in force, and premiums are covered by the insurance company.
Living benefits can provide crucial financial support during challenging times, offering peace of mind and alleviating some of the financial burdens associated with serious illnesses or disabilities.
The amount of life insurance you need depends on factors like your income, outstanding debts, expenses, and financial goals. It’s recommended to have coverage that can replace your income for several years.
Consider your financial situation, long-term goals, and current needs. Evaluate the different types of policies with our agents and we will compare quotes from reputable insurers for the best option.
Yes, depending on the type of policy you have, there may be options to adjust coverage, premium payments, and beneficiaries.
In most cases, the death benefit from a life insurance policy is not taxable for the beneficiary. However, if the policyholder’s estate exceeds a certain threshold, it may be subject to estate taxes.
To file a life insurance claim, you’ll need to contact the insurance company and provide them with the necessary documentation, including a death certificate and any required forms. The insurer will guide you through the process. We compassionately assist all of our clients through this process during their time of grievance.
They are additional/optional provisions you can add on to your main policy.
Guaranteed Insurability Rider
As you age, your health may change, making it difficult to secure additional life insurance. The guaranteed insurability rider comes to your rescue. Once your original policy is approved, this rider allows you to increase coverage at specific times without undergoing additional medical screenings.
Waiver of Premium
Prepare for unexpected financial challenges with the waiver of premium rider. If certain conditions are met, such as total disability preventing you from working, this rider exempts you from paying premiums.
Accidental Death Benefit
This rider boosts your death benefit if you pass away due to an accident. It serves as an additional financial safety net for your family in the event of an unforeseen loss.
Accelerated Death Benefit: Terminal Illness Rider
Access your life insurance funds before passing away with the terminal illness ADB rider. To qualify, a terminal illness diagnosis with a life expectancy of less than one to two years is required.
Accelerated Death Benefit: Chronic Illness Rider
The chronic illness rider, another form of accelerated death benefit, necessitates a diagnosis of a chronic illness. Many insurers require an inability to perform at least two of the six daily living activities for approval.
Accelerated Death Benefit: Critical Illness Rider
To qualify for the critical illness rider, a diagnosis of a critical illness is required. Although specific requirements vary among insurers, conditions such as cancer, heart attack, or kidney failure typically meet the criteria.
Child Rider
The child rider adds a small death benefit to your policy for your minor children. When they reach adulthood, they may have the option to convert this coverage into their permanent policy.