As a Licensed Clinical Social Worker, family member, and friend, I have seen firsthand the stress that not having life insurance can have on family and friends. For example, several years ago, I received a call from a local hospital informing me that one of the individuals served by our clinic had died in the emergency room. Upon further review, it was clear that this person had no insurance and limited family support. At that time, like many people, I thought that the government might cover the costs of insurance or that family members would help out. Neither happened. Instead, our team members came together to raise money, negotiated with the funeral director for the lowest price possible, and staff performed the services. Having life insurance for everyone is essential. Ensuring that everyone has a decent burial/funeral is necessary, especially for those who did not receive the dignity and support they deserved. While for others, life insurance provides family members/friends with one less concern. Do you have life insurance? If not, click here for information about obtaining life insurance for you and or a loved one. We have licensed agents in Maryland and DC, and we can refer you to agents throughout the United States. Life insurance is cheaper than you think.
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What is Life Insurance?
Life insurance helps your family maintain their standard of living if something should happen to you. Life insurance is a very
important choice.
A life insurance policy
• can potentially provide your family with
enough money to fulfill their obligations
and pursue their dreams
• protects against loss of income if you
should die too soon
• helps secure your family’s future even if
you are no longer with them
A permanent life insurance policy
with cash value may be able to
• help meet accumulation goals, if
properly funded, through cash value
policy loans and withdrawals
, such as:
– helping to fund your children’s
education
– supplementing your retirement
income
• provide a financial resource if you
become seriously ill through the use of
living benefit riders. Riders can be added to provide you with benefits you may use throughout your lifetime, called living benefit riders. These riders can accelerate the death benefit should you become ill or injured or
potentially provide a guaranteed source
of retirement income if you live too long.
There is a choice of products and riders to
help meet any lifestyle.
Types of Life Insurance
There are three basic types of life insurance you can choose from: • Term • Whole Life • universal Life
Term Life – guaranteed coverage for a set period of time or until a specified age, as long as
premiums are paid. • usually renewable once the time period has expired, although it’s likely premiums will increase
• provides a death benefit if you die within that defined period of time – it does not
accumulate cash value
• generally allows you to purchase a higher death benefit for your premium dollars;
frequently the most affordable coverage
Whole Life – (Living Benefit) – called “permanent” insurance because it remains in force for your lifetime as long as you pay the scheduled premiums
• premiums are designed to remain level over the life of the policy
• you have the potential to build cash value that is tax-deferred and you may be able to
access these funds on a tax-advantaged basis
• when you pass away, your beneficiaries will receive the amount of the death benefit ,
minus any outstanding loans and loan interest that may be due on the policy
Universal Life – another type of permanent life insurance that has flexibility built into it
• the flexibility allows you to adjust the face amount of your policy, and the premiums
you pay. • build cash value without paying current income taxes on the increases and you can. potentially access the funds using tax-free loans and withdrawals
• flexibility allows you to stop paying premiums if there is enough accumulated value
in your policy to cover the cost of insurance each month. You can then pay additional
premiums to build back up accumulated cash value
• you may be able to increase or decrease your death benefit depending on your life
insurance needs. An increase may require additional underwriting
Two of the most popular types of Universal Life policies are Fixed Universal Life and
Indexed Universal Life. One of the main differences between them is how the policy’s
interest is credited. Both off er you varying degrees of guarantees and returns, based on
your appetite for risk.
• Fixed Universal Life – interest rate is declared by the company
• Indexed Universal Life – interest is based on the changes in value of a market index
Who Do We Work With
As an Independent Life Insurance Agency, we work with highly rated insurance carriers to help you with your needs. Our Carriers offer Level Premiums, Level Benefits, and Policies with Cash Value which means money is available for you now and later. We work to help everyone, to include Veterans as well as non-Veterans and individuals up to age 90. Don’t Leave Your Family in Debt. Same day coverage may be possible.
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Helpful Definitions
Accelerated Death Benefits
Part of a life insurance policy that lets you access your death benefits while you’re still alive, usually to cover the cost of care if you were to have a terminal illness.
Accidental Death and Dismemberment Insurance
Also known as AD&D, this type of insurance pays out if the insured dies, becomes blind or is dismembered (loses a limb) in a covered accident.
Accidental Death Insurance
An insurance policy that pays out only if the insured dies in a covered accident. Some of the leading causes of accidental death include poisoning, auto accidents and falls.
Agent
A professional licensed by the state who has the authority to sell insurance. An agent can be independent and represent multiple companies, or a direct writer who sells policies for only one company.
Amount of Insurance
The amount of money paid by an insurance policy. It’s also known as the coverage amount, death benefit or face amount. For example, if your homeowner’s policy has a limit of $300,000, then the amount of insurance you have for this policy would be $300,000. You are responsible for losses over this limit..
Annual Renewable Term
A type of life insurance that covers you for a term of one year, then renews every year at an increasingly higher premium. A person might buy yearly renewable term life because he or she wants to cover only very short-term debts, or is between jobs and anticipates buying group life insurance through a future employer.
Automatic Premium Loan (APL) Provision
Let’s say you miss a payment on your whole life policy. Rather than cancelling your policy, the insurance company withdraws money from the policy’s cash value and uses it as a loan to pay the owed premium. Your insurance stays in force thanks to the Automatic Premium Loan Provision.
Beneficiary
The person or persons who will receive the death benefit of your life insurance policy or annuity. This can be anyone … spouse or partner, child, a church or charity.
Benefit Period
The length of time that services are covered under your plan. It has a start and an end date. Most people are familiar with the benefit period for medical insurance, but term life insurance, disability, long-term care, homeowner’s, and auto insurance policies will also carry a benefit period.
Benefit Period
The length of time that services are covered under your plan. It has a start and an end date. Most people are familiar with the benefit period for medical insurance, but term life insurance, disability, long-term care, homeowner’s, and auto insurance policies will also carry a benefit period.
Cash Surrender Value
If you cancel your whole life policy and take the cash value, the amount you may be able to walk away with is an amount known as the cash surrender value. This amount equals the cash value minus a surrender charge, any outstanding loans and interest on those loans.
Cash Value
Typically when you have whole life insurance, a portion of your premiums go into an investment account, or the cash value. This money grows with interest over time. You can do many things with the cash value, including taking out a loan, using it for any needs that arise or funding the policy. The longer you’ve had the policy, the higher the cash value will be. Please remember that loans do accrue interest and any outstanding loan balance reduces the death benefit at the time of claim.
Death Benefit
The amount of money paid to the beneficiary of a life insurance policy when the insured dies.
Face Amount
The amount of money a life insurance policy will pay upon the insured’s death. The name comes from the fact that this amount is typically shown on the “face” or top sheet of the policy.
Fixed Period Option
The option in a life insurance policy that makes death benefit payments for a set length of time. The number of payments is fixed, while the benefit amount is determined by the proceeds in the policy. For example, a benefit of $800 per month is paid for a period of 36 months.
Grace Period
The period of time a policy stays in force even after a premium payment is due and goes unpaid. It’s usually a month so don’t wait too long to make things right.
Guaranteed Insurability Option (aka Guaranteed Purchase Option)
A rider that ensures you will be able to buy more insurance in the future as your need for coverage increases. Generally, you will be allowed to purchase additional life insurance at specified ages without having to provide evidence of insurability.
Guaranteed Renewable
The right to continue your insurance each year as long as premiums are paid. Even if you develop a serious health condition and have a lot of claims, you have the assurance that your insurance will stay put.
Insurance Policy
The physical, legal document that an insurance company issues to the policyholder which outlines the terms of the insurance.
Insured
The person who is covered by an insurance policy. You’re bound to come across this word when reading through your policy and it’s important because it’s probably you!
Insurer
The company that underwrites the insurance policy and pays out claims. It’s important to choose an insurer who is reliable and financially stable.
Life Insurance
Life insurance is a contract with an insurance company that helps financially protect your loved ones if you pass away. You pay your premiums, and, if you pass away while coverage is in place, the company pays a lump sum (called a death benefit) to your beneficiaries. This money can help them with things like funeral costs, rent or mortgage, day-to-day living expenses, education costs and more.
Lifetime Coverage
An insurance policy that lasts for your entire life, as long as premiums are paid. Whole life insurance is a type of permanent life insurance designed to provide lifetime coverage.
Living Benefits
Part of a life insurance policy that lets you access funds while you’re still living, usually to cover the cost of care if you were to have a terminal or catastrophic illness.
Non-Smoker Rates
It’s no secret that non-smokers are expected to live longer than smokers. For this reason, they are often rewarded with lower life insurance rates. Anyone who hasn’t smoked for at least a year before applying for a life insurance policy may benefit from this discount.
Permanent Life Insurance
A life insurance policy that lasts your entire lifetime, as long as premiums are paid. One of the most common types of permanent life insurance is one you’ve likely heard of: whole life insurance. It can build cash value over time, as well as provide a death benefit to your beneficiaries.
Policy
A written contract between you and the insurance company stating the terms of insurance.
Policy Dividend
Many whole life insurance policies provide dividends representing a portion of the insurance company’s profits that are paid to policyholders; policyholders are not typically guaranteed dividends. The dividend amount often depends on the amount of money paid into the policy. Dividends are typically not guaranteed and are subject to the financial performance of the insurance company.
Policy Loan
Let’s say you own a whole life insurance policy and need emergency cash. One option is to get a policy loan, which accesses the cash value of your life insurance. You’re not actually withdrawing the cash value, it’s simply being used as collateral on the loan. Keep in mind that loans accrue interest and if the money isn’t paid back, the money is withdrawn from the policy’s death benefit.
Policy Proceeds
The amount of money actually paid on a life insurance policy at death, or when the policyowner receives payment at surrender or maturity.
Policyowner
Also known as the policyholder, this is the person who owns an insurance policy. It’s usually the insured person, but it may also be a relative of the insured, a partnership or a corporation.
Rider
An optional add-on to an insurance policy that provides additional benefits for an increased cost. Examples of life insurance riders include accelerated death benefits and critical illness riders.
Term
The specific time period for which the insured person is covered under a term life policy. The insured person can be covered for a set number of years (usually 10, 20 or 30 years) or until the person reaches a certain age, such as 80. The policy pays benefits only if the insured dies during the term.
Term Conversion
The right to convert a term life insurance policy to a permanent, whole life policy. Usually the insured can convert to a permanent policy at the same amount of coverage without providing evidence of insurability. This means you can have lifelong protection regardless of your health as long as you convert before the deadline listed on your policy.
Term Life Insurance
A life insurance policy that provides death benefit protection for a certain length of time, usually 10, 20 or 30 years. The policy pays a benefit to your beneficiaries should you pass away during the term. Once the term expires, you can either renew it for another term, convert the policy to permanent coverage, or allow the policy to end.
Underwriter
The person in an insurance company who reviews the application for insurance and decides if the applicant is acceptable and at what premium rate. For life insurance, the underwriter will look at a number of data points, including your lifestyle, occupation, medical record, financial history, and driving record.
Underwriting
The process by which an insurance company reviews your application and other information and decides whether to insure you and if so, how much you’ll pay for coverage. For life insurance, the underwriter looks at data like your age, health and medical history as well as lifestyle information like your hobbies and driving record.
Universal Life Insurance
A type of life insurance that can protect you for your entire life, while offering the flexibility to change your premium or benefit amount as life takes twists and turns. Universal Life Insurance also allows you to build cash value over time that you can use for unexpected expenses that come up.
Whole Life Insurance
A type of life insurance that provides a set amount of coverage for your entire life. You pay the same premium amount for the life of the policy, so you always know what to expect. In addition to providing a death benefit, whole life policies build cash value over time – money you can use if the need arises.
10, 15, 20, 30-Year Insurance Policy
A life insurance policy that covers you for 10, 15, 20 or 30 years, known as the term. If the insured passes away during this time, the insurance company will pay his or her beneficiaries. Once the term ends, so does the policy.
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