Take the worry out of life
Gain Peace of Mind and Protect your family
Life insurance is more affordable than most people think. Burns Insurance will discuss the different options with you and help you choose a policy that provides financial stability for your family.
Types of Life Insurance policies
Term policies typically offer the lowest monthly premium and are usually the best option if you have a limited budget or a temporary need like:
- Mortgage protection. – (ex. Pay off Home)
- Income replacement. – (ex. Pay Utilities and keep current lifestyle)
- College education. – (ex. Leave funds for children’s education)
- Debt relief. – (ex. Relieve current loan and credit card debts)
The typical Term policy will provide terms of 10,15,20 or 30 years, and it pays a death benefit only if you die in that term.
Whole Life policies are typically the best option if you are looking for life-long protection and to cover Final Expense needs, or an option to accumulate a tax-deferred benefit that gives you cash value. Whole Life policies can build up a cash value which in turn can allow you to take out a loan against the cash value, or paying your premium after your policy is fully paid up.
Universal Whole Life policies are also a permanent type of coverage and typically can cost less than a standard Whole Life policy. Universal life insurance, also called UL, provides guaranteed death benefit payment to heirs and give the client the ultimate advantage of flexibility. A portion of your premium payment goes to cover the cost of insurance (COI), and the remainder is parked in a designated account to earn interest.
My Reasons for Living and Insuring that Life
I have peace of mind knowing that both my wife and I have life insurance in place. These policies will provide financial support for our family when it is needed most.
For most, term life insurance will be the preferred choice because it offers the most significant benefit amount for the lowest price. Furthermore, since most expenses aren’t permanent (mortgage balance, young children, college education), getting the most amount of coverage in the most crucial period when the family is young is a sensible option.
That said, there are a few cases for a permanent policy which can be best used for estate planning or buying a small final expense policy.
You probably do. Most group coverages aren’t portable, which means if you lose or quit your job, you also let go of your insurance coverage. Most importantly, group coverage doesn’t offer sufficient protection and typically offers only one or three times your yearly income, which by all accounts, isn’t enough. (My recommended amount is between 3-5 times your yearly income, some recommend 10 times yearly income.) My advice is to get it through your job if it’s free or at a reasonable price and supplement it with life insurance outside your workplace. It is very important to have your own Life insurance in place that you personally own that can not be altered by employment changes.
Buying a policy early in life and/or in good health is a good way to ensure a lower premium. The older you are, the higher the premiums, and the more risk you have of developing a health condition that could increase your premium or disqualify you from getting coverage at all
Life insurance riders are add-on provisions to enhance or customize your current coverage to fit your needs. Some riders come at no additional cost and are baked in the coverage, where other riders can be applied for a small additional cost. It’s worth noting that riders are typically purchased with the policy and can’t be added later. Here are a few common purchased riders:
- Waiver of premium - If you become disabled and can no longer work, a waiver of premium rider covers the cost of your life insurance premiums by withdrawing from the death benefit
- Term conversion - Many carriers offer you the ability to convert your current Term coverage into Whole Life, a lot of times without having to do any re-examinations. There are usually time frames for this option. (Ex. some carriers state your have to convert before the age of 65 or before your reach the last 5 years of your policy coverage term).
- Accelerated death benefit - It’s a provision that allows you to collect a significant portion or percentage of the death benefit while you are still alive should you become terminally ill. The money can be used at your discretion to pay for medical expenses or even to do specific things with your family and friends while you still can enjoy them. The amount you take out early will be subtracted from the death benefit payment along with interest.
- Child Protection Rider - Child riders can be added to your life insurance policy to provide a small death benefit if one of your children dies while your policy is in force. No one wants to think about a child’s death. But with a little planning, if the worst thing that could happen to you does happen, you won’t have to worry about funeral costs on top of grieving.
- Accidental death benefit rider - An accidental death and dismemberment policy pays in addition to the death benefit to beneficiaries ONLY if you die as a result of an accident-related event (car accident, drowning, etc.).
- Return of premium (ROP)- Some term policies have a return of a premium feature that allows for a refund of all or some of the premiums you paid through the term of the insurance if no death benefit was paid. The premiums for policies with this feature tend to be higher, and you must be careful not to miss any payments throughout the term in order to take advantage of this feature.
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Brian Burns is a local insurance agent that lives in Grapevine with his wife, Nioka, and daughter Genevieve. His office located in Grapevine can help with Home, Auto, Life, and Business Insurance.