What You Need to Know About Life Insurance

Life insurance can seem like a complicated topic, making it easy to put off until later down the road. However, it’s important to understand your coverage options and its advantages from the get-go. After all, there are many benefits to getting started early in life!
According to the 2022 Insurance Barometer Study, most people recognize the need for life insurance, but only 52 percent say they have it. If you want to learn about life insurance and your options, we have you covered with this guide on what you need to know, how it can be a powerful tool, and different coverage options. Additionally, we offer our simple life insurance calculator to help you find out how much you might need.
Life insurance is protection for your family’s financial future should the worst happen. It can help lower the financial risks your family faces in the event you can no longer provide for them.
When you purchase a life insurance policy, you pay premiums on a periodic basis. Then, upon the death of the insured, a lump sum is paid to the beneficiaries. There are many different types of coverages with multiple add-on options, so policies can be customized to match your personal needs and goals.
Before digging into the details of the different types of policies, it’s helpful to understand the benefits of having life insurance and how it can help protect your family in the long run.
However, even if you don’t have children, buying insurance can be a smart financial move. Many permanent life policies provide not only a death benefit but also allow you to use your accumulated cash value to help fund future financial objectives, such as buying a home or retirement.
There are different types of life insurance with many additional options available. Here are the most common types you’re likely to hear about as you begin your search for the right coverage.
Both whole and universal policies are types of permanent life insurance. These policies typically have two components: cash value accumulation and death benefit. A permanent policy is designed to be kept for a lifetime. With permanent life insurance you may pay slightly higher premiums than with a term policy, but remember you’re earning cash value with your premium dollars and you have coverage for life.
A term life insurance policy provides a predetermined sum (also called death benefit) if you, as the insured, die during a specified period of time. The term may be anywhere from one year to over 20 years long depending on the policy you choose. Because term insurance is designed to be kept for a shorter amount of time, term life insurance is one of the most affordable options. Unlike whole and universal policies, there is no cash value.
Check out our new Term product – Increasing Term. This policy gives you the ability to obtain coverage now, but also secure more coverage in the future. With Increasing Term, you’ll be allowed to increase coverage up to double the face value of your policy over the first five years without having to go through the underwriting process again.
Some term life insurance policies have the option of being converted to a permanent life insurance policy. This gives you the benefit of initially obtaining a less expensive policy, while also being able to switch to a permanent policy as insurance needs and financial situations change. By converting to a whole or universal life insurance policy, you’ll be able to take advantage of the additional benefits, such as a policy that never expires and accumulating cash value from which you can borrow.
When it comes to deciding on your life insurance policy, one of the biggest questions to answer is how much do you need. There are a variety of factors that come into play when it comes to your needs, including age, salary, expenses, debts and future financial needs.
Fortunately, uncovering your life insurance needs is easier than you think! Connect with a Farm Bureau agent to learn more and to find the coverage option that fits your needs.