What Agents Wish You Knew About Life Insurance

We know that getting life insurance can be overwhelming. Do I need term, life or universal insurance? Should I get insurance while I’m young or wait until I’m older? How can I get the best price on life insurance? And do I really need a policy? There are so many options available to you, and picking the right policy for your needs requires understanding what’s available and what suits you and your family best. 

That’s why we’re here to help. Insurance agents understand the types of coverage and can help you select the one that’s best for you. It’s always best to talk to an agent directly about your specific circumstance. But to get you started, we’ve reached out to some of our experienced agents and asked them questions about purchasing a life insurance policy. Learn some tips that can help you become more informed as you make your own decisions.

Life Insurance: The Basics

Here are a few terms to know before we explore the agents’ answers:

Insurance Premium: This is the price you pay for your policy, typically monthly, quarterly or annually.

Policy: Your policy is a contract of insurance between you and the company that provides your insurance. In return for your premium payments, the company agrees to pay a lump sum to your beneficiaries, should you pass away during the term of the policy.

Term Life Insurance: A type of life insurance that provides protection for a specific period, called the term.

Whole Life Insurance: A type of permanent life insurance, meaning it lasts for the policyholder’s entire lifetime, that comes with three important guarantees: 1) a premium that will never increase, 2) a death benefit that [MK1] won’t decrease unless a loan is taken out and not repaid, and 3) a buildup of cash value that can be accessed through policy loans.

Universal Life Insurance: A type of permanent life insurance that offers flexibility to meet your changing needs. With a universal life insurance policy, the death benefit can be increased or decreased (within certain limits) during the life of the policy. The premium you pay can be adjusted within a range according to your goals and ability to pay. The cash value in a universal life policy can grow in various accounts that you feel comfortable with. That cash value can be accessed through withdrawals or loans for emergencies or futures needs. 

Life Insurance Tips From Agents

Ever wonder what an insurance agent would like you to know about life insurance? We talked to some of Farm Bureau’s experienced agents to find out what they’d tell clients – and what they wish clients knew. Here are our questions and their answers.

What is your top recommendation for a client who doesn’t have life insurance? 

“The first question that must be answered is ‘Why?’ This question always gets the conversation started regarding the two reasons why people need life insurance which is debt and protecting the people they care about.”

- An agent with 35 years of experience

Learn what you need to know about life insurance.

What is one mistake clients make when getting life insurance? 

“Not getting enough coverage and thinking they can’t afford it. Life insurance can be affordable.”

- An agent with 10 years of experience

Consider if a single person needs life insurance.

Where should someone who is looking to get life insurance start, and how do they know which product is best? 

“Finding an agent is the first step. If they don’t have one, they can try searching for someone in their area or by asking their family or friends who they recommend.

Once they find an agent they feel comfortable with, they should work with them to do an analysis to better understand what their needs are. The analysis can consist of looking at current debt, their income, their lifestyle, what they own, etc. Every product is great, but it depends on the individual and their circumstance.”

- An agent with 11 years of experience

Read about life insurance needs at different stages in life.

How much life insurance does someone need? 

“There is no magic number for this. Each person’s situation is different, and their needs will be different. I always recommend that each client purchase enough coverage to cover any debt they may have and replace their income at a minimum.”

- An agent with 10 years of experience

Find out how much life insurance you need.

Is life insurance expensive? 

“It can be very affordable, and it is always cheaper to purchase when you are younger. Finding an agent and connecting with them can help understand what options a person may have.”

- An agent with 11 years of experience

Read about five ways to save on life insurance.

My employer provides life insurance. Do I need another policy? 

“Absolutely! Having your employer provide life insurance is a plus, but it’s important to have a policy outside of this in case you switch jobs or lose your job.” 

- An agent with 18 years of experience

Check out our life insurance calculator.

Why do I need life insurance? 

“Life insurance can help cover any income your family may have to go without if you pass. There are costs associated with funerals whether you are young or old and life insurance can help with this. Another reason, if you have debt, it does not go away after you pass — even if you are young, single and healthy. Speaking with an agent can give a better insight since every person’s situation is unique.”

- An agent with 4 years of experience

Read about unexpected ways to use your life insurance policy.

Insurance Is Not One-Size-Fits-All

Before you take out a life insurance policy, review the different types available to find the best option for you. Two of the most common life insurance policies are permanent and term life. A permanent life insurance policy will have a cash value accumulation and a death benefit, whereas term life insurance provides a death benefit if the insured passes within a specific time. Within those types of insurance, there are various types that can work to better protect you and your loved ones. An agent can help you sort out your options.

When Your Life Changes, Your Coverage Should Change, Too

Depending on what stage of life you’re in, your life insurance needs may change. Certain factors like a change in age, marital status and family size can impact your coverage needs.

When getting married, having a discussion about combining your finances will likely also include your life insurance policy. If you’re starting a family, you’ll want to update your life insurance policy to cover your entire family, your home and anything else that may depend on your income. Consider meeting with an insurance agent to find the best coverage option for you. 

A Gap in Coverage Could Be Costly

Life can come at you fast. Not having the right type of coverage, or being underinsured, can cost you or your loved ones a lot more than you would like it to. There are always risks to being underinsured that you should consider when you’re getting life insurance. If you were to pass away and not cover your bases, your family may be left with debt that you don’t want them to have to deal with. Life insurance can help mitigate those costs.

Life Insurance Can Help You While You’re Living

Did you know that life insurance can be used while you’re living? Although its purpose is to help your family if you pass away, it can also help while you’re living. With certain life insurance policies, money can be used to pay for terminal illnesses with a specific rider added to your policy. You can also withdraw from your life insurance policy, though it may reduce the value of your death benefit in the future.

Depending on the life insurance policy you have, you may be able to take out a loan on the policy’s cash value. With any of these options, you should consult with your agent to learn more about your specific policy.

There are various myths about life insurance that are not necessarily true, and you want to sort out myth from reality. Take the time to speak with an agent to better understand what coverage best suits your needs. 

Your Agent Is There to Help

Finding the right coverage and understanding the different types of life insurance available may be a bit overwhelming, especially if you’re young and unsure about what kind of insurance you really need. Agents are a great resource for helping you understand what you need and how to get started.

If you have questions about life insurance, reach out to your Farm Bureau agent to get started. Speaking with an agent can help give you peace of mind when thinking about the future.