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A Simple Guide to Life Insurance

Purchasing Life Insurance to protect your loved ones doesn't have to be a difficult process if you understand the basic concepts and work with an experienced professional.  Here are some things to consider before starting:

How much do I need?  Most people don't really understand how much life insurance coverage they need and other than a guess the only way to truly know is to do what is called a 'Needs Analysis'.  Here is a link so you can calculate this for yourself:  http://www.planner.us/gen_calcs/needs_analysis.htm

What Kind of Life Insurance do I Need?  There are 3 basic types of Life Insurance, each can be considered for your own personal situation:

• Term Insurance:  this insures you for a fixed length of time (10, 15, 20, 25 or 30 years), after which the policy expires and you would have to reapply.  Term is the least expensive type of Life Insurance and is best used as protection for a growing family to provide income for living expenses and life events (mortgage repayment, college expenses, etc) in the event of a premature death of an income provider.  Premiums for Term Insurance vary greatly from company to company as well as your final Underwriting classification and the length of the term so it's important to understand all of this before purchasing.
• Universal Life:  this insures you permanently as long as you pay the premiums and can also build significant Cash Value through the investment side of the policy.  If used properly Universal Life can combine retirement income with a death benefit and other living benefits to provide you with a complete set of retirement benefits.
• Whole Life:  this also insures you permanently as long as you pay the premiums.  Whole Life is best used to provide for life events such as Final Expenses as the premiums are usually much higher than Universal Life.  There are many companies that offer Whole Life and Final Expense policies do not require a medical exam.

There are so many different Insurance Companies, how do I pick the right one?  you're right, there are hundreds and hundreds of insurance companies offering policies in your state.  Let's start with some basics:

• Rating:  A.M. Best provides ratings for all insurance companies based on their financial stability.  It's important to insure with a company that has an 'A' rating or better, any less than that and you may encounter problems (although each State has an Insurance Guaranty Corporation that backs insurance policies and annuity contracts up to specific limits).
• Rates:  each company has a rate structure for a particular type of Life Insurance, there is no reason to insure with a higher priced company as long as you choose a company with a similar rating
• Underwriting:  it is really important to understand how Underwriting will affect your final rate.  Each company has a complete list of guidelines that will determine your final rate.  An experienced Agent will review your personal situation before quoting a rate so you understand the expected outcome.  Many internet sites will just provide the lowest rate, which is based on near perfect health-unless you fall into that category (less than 10% of our population qualifies for this classification) you could find out in 8 weeks that your final rate is 2-3X higher than expected.
• Medical vs. Non-Medical:  many insurance companies offer life insurance that does not require a medical exam.  The rates for Non-medical life insurance are higher than the best rates for those in excellent health;  Your Agent can review your situation and advise whether considering a Non-medical policy makes sense for you (sometimes it is the best choice).
• Tobacco Use:  using Tobacco will increase your rates signficantly (as much as 100%) but some companies only increase rates by 25-30% if you are in good health.  Make sure you know the best choices for Life Insurance if you use Tobacco products, it could save you many thousands of dollars in premiums over the lifetime of the policy.

What's the Best Way to Shop for Life Insurance:  if you have gone through all of the above on your own and are ready to make a decision, you have a choice of going direct, through an internet site, or calling us at 1-800-516-4731 so we can process your application in a timely fashion (your rates won't change, they are fixed and regulated).  If you haven't yet gone through this process and need help, just call us or send an email to thegoldenagency@gmail.com and we'll do our best to make sure your needs are handled in a professional manner.