Common Questions about Life Insurance

At Absolute Insurance, we often hear some of the same questions regarding life insurance.  Here are a few of the most common questions that we get:

1.  I already get life insurance through my employer - I don't need additional life insurance, do I?
Oftentimes the coverage you receive through your job isn't enough to care for your family in the event that you die.  You will also lose the coverage once you stop working there.  Most of our clients who have life insurance with us keep the coverage their employer offers, but it serves as a supplement to their regular life insurance policy that they have with our agency.

2.  I know most life insurance policies require a medical exam - what does that involve?
The medical exam is similar to a basic physical that you would have at your doctor's office.  The insurer will send a technician to your house or office for the exam.  The exam usually consists of your vitals (height, weight, heart rate, etc) and sometimes a blood sample.  They may swab the inside of your mouth to test for tobacco use.  

3.  What is the death benefit on a life insurance policy?
The death benefit is the face value, or the amount your policy is worth.  This is the amount that your life insurance policy will pay out to your beneficiary should you die.  

4.  Can I list more than one person as a beneficiary?
Absolutely!  You can have one person as beneficiary or multiple people.  For example, if you have 3 children and wanted to split the policy between your three children you can list them all as beneficiaries.  You can also list a trust as a beneficiary too.  

Life Insurance 101

Thinking of buying life insurance, but are overwhelmed with the different options?  You aren't alone!  Oftentimes we have clients tell us that they have avoided purchasing life insurance in the past because they didn't know which type of policy is the best for them:  Whole Life, Term Life, Transitional Life - what does it mean?  

What is life insurance?
Life insurance is a contract between you and an insurance company to provide you with coverage based upon your timely payment of premiums. Life insurance provides a death benefit to your named beneficiary (usually a spouse) upon your death.

Types of Life Insurance:
There are several types of life insurance, but the main types we sell are term, whole life, and transitional life.  

• Term Life Insurance:  A Term Life Insurance policy is a life policy for a fixed period of time, or "term", such as 20 years.  Some policies allow the insured to convert the policy at the end of the term into a permanent policy.
• Whole Life Insurance:  A Whole Life Insurance policy covers someone for the rest of their life.  It also includes a cash value component that increases over time.  You can borrow money against the account or surrender the policy for the cash. But if you don’t repay policy loans with interest, you’ll reduce your death benefit, and if you surrender the policy, you’ll no longer have coverage.
• Transitional Life Insurance:  One of our life insurance carriers, Pekin Insurance, has come up with a product that is somewhat of a hybrid between term life and permanent whole life insurance.  Transitional Term Life Insurance provides a high, level term death benefit for the selected period, ending with a lower paid-up permanent whole life death benefit of an amount chosen by the insured at the time of policy issuance.  All the policy values are fully guaranteed.  Here is an example of how a transitional life insurance policy would work:
• Let's say you want a $1,000,000 term life policy for a period of 20 years. After 20 years, your plan is that your home will be paid off, you will be debt-free, your children are raised and on their own, and you no longer need the $1,000,000 you once did. You still want some life insurance that would pay final expenses and maybe leave something left for your kids and grandkids.  With Transitional term, you could set the term limit for $1 million for 20 years and at the end of the 20 years set the policy up so that you would have $50,000 in paid-up whole life insurance that will not go away for the rest of your life and you will not need to contribute to or pay another premium toward that $50,000 for the remainder of your life.  The $50,000 is fully paid up and guaranteed.  I am using $50,000 as an example but the amount could be anywhere between $10,000 and $950,000 in this example.

You can find more information regarding life insurance on our website.  To speak with an Absolute Insurance Agent, please call our agency at (515) 279-2722 or service@insaia.com.

Love. We sell it! Come and Get Your Love Insurance!!!

No, really... you read that right! Perhaps it is not *exactly* what you think when I say we offer and sell love insurance. This is definitely not "broken-heart" or "a-promise-to-find-you-love" insurance, however, there are probably a host of other sites that will do so or at least lay claim to such a feat, but we do offer and sell "Love Insurance".

You see, when you purchase life insurance, you do so for one primary reason: Love. You purchase life insurance because you love someone and respect the idea that when you pass, there will be obligations left behind for your loved ones to have to sort out and deal with. Now, money from a life insurance (or Love Insurance) settlement will never replace you, but it can help to prevent a tragic personal loss from becoming a tragic personal loss compounded with a tragic financial loss.

As it sits today... this very moment... if you are struck by a bus, could your surviving family members, those that depend on your being-there and your paycheck, could they not only make ends meet tomorrow but also do that in addition to paying the raising costs of final expenses? Will the daycare still need to be paid? The mortgage or rent? Will your children have the option for college without soul-crushing student debt? Will... will... will... the obligations are truly endless but, while you may not be there, you can, in the very least, show your final act of true love by purchasing a Love Insurance policy that can help with these financial consequences of a life filled with love, lived. Even though you aren't there, these proceeds can go to help buy your daughters wedding dress, money down for your kids first house... all this for the price of a six pack and pizza (not all that much).

Show your love for your family and contact your Absolute Agent today at 515-279-2722. We have many options to review with you, but when it comes down to it, having something in place is the truly necessary ingredient to bake your love cake. Visit our website at: www.insaia.com 

Meet Dan

Meet Dan. Dan is not a "1-800" number. He is ready to assist you with all your personal lines insurance. Have you compared your coverage and rate lately? Let Dan help: 515-279-2722 or www.insaia.com. Serving the Des Moines Metro and surrounding areas.

Things Insurance Fans Love

As a Local Independent Agent, I often have the pleasure of discussing many facets of life with clients over the phone or in the office. Sometimes these jovial discussions remain just that: jovial and entertaining. However, other times, folks tell me things they don't necessarily care for about insurance. I understand many of these concerns, but when it comes down to the reality of what insurance actually does and how it responds when we are in our most desperate positions, I cannot help but to be a fan and advocate. Usually, upon reflection with the clients, we both end up feeling better about the situations.

Here are just a few items that insurance fans love:

• Risk Transference. This is the basic tenet of insurance. For a fee, we allow another entity to absorb our first dollars worth of liability. This is AWESOME! The insurance company gets behind us when we have momentary lapse of judgement and cause damage to another party up to our policy limits. Without this, our bank accounts, wages, homes, and retirements would all be subject to lawsuit that follows! Better yet, get yourself an umbrella policy and boost those limits even higher with broader ranges of coverage.
• Roadside Assistance. If you have ever broken down alongside the side of the road, then this is an awesome endorsement available via most companies auto policies (restrictions apply per company).
• Water Back-Up/Sump Pump Failure. This is another one of those special endorsements via the home insurance policy. What happens to your sump pump when the power goes out? You guessed it- it goes out as well. If you have a finished basement, these mild irritant just became a costly mess. However, if you this endorsement on the home insurance, it will pay to cover clean up and the cost to replace ruined building items and contents (subject to policy limit).
• Rental Car Reimbursement. You've just had the accident. Sure enough, you were at fault. You have great liability limits and the other party will be handled well through your carrier, but now your sole means of transportation will have to be in a shop for the next two weeks to get repaired. This is more than a mild annoyance. This is devastating! Thankfully you and your Absolute Agent added rental car reimbursement to the full coverage on your vehicle so that you can utilize a rental car while your vehicle is being repaired. Another day saved through a proper conversation with your Absolute Agent (limits apply to per day cost and coverage is only available if comprehensive and collision coverage is purchased on the vehicle).

These are but a few of the things insurance fans love. There are definitely more to review in detail and we will definitely touch on them in the future. Until then, contact your Absolute Agent today at 515-279-2722 for more information. www.insaia.com

Ensuring Insurability and More!!!

Do you have children or grandchildren and are tired of buying plastic toys or gizmos that will end up being stored and thrown out in the next few months? As a parent to 2 children myself, I know this dilemma well and I want to give my children beneficial gifts in addition to next big Christmas must-have. There are better uses for that money. One of which is a Children’s Universal Life Insurance policy through Pekin Life Insurance that offers a Guaranteed Insurability Rider. These are very reasonably priced policies that are permanent and build a cash value. In addition to that, they have a rider that allows the owner or the insured on the policy to increase the death benefit up to 7 times throughout the lifetime of the child at various ages indicated within the policy. The best part about this is that there are NO HEALTH QUESTIONS and NO NEW UNDERWRITING for the increased death benefit. There are too many heartbreaking stories of children developing chronic diseases that leave them uninsurable in the future. Now is the time to put this important protection in place and give yourself the peace of mind that your child can increase their coverage even in the event of a tragic diagnosis. Call your Absolute Agent today at 515-279-2722!

Life and Home: Similarities Galore

Why do some people buy houses for their primary residence instead of living in apartments?  In most cases, there are a number of reasons, ranging from the desire to own instead of renting to tax-advantaged growth to building equity to overall security.  Do any of those reasons sound familiar?

Permanent life insurance offers many of the same benefits as home ownership.  You buy a home because you want permanence, a place to put down roots, because you are always going to need a place to live.  Renting an apartment is generally a temporary solution to housing needs.  Buying permanent life insurance, whether it be whole life or universal life, is what one does to cover a need that will always be there.  Term insurance is temporary, and the premiums continue to increase, just like rent on an apartment.

Permanent life insurance also offers equity buildup, just like home ownership does.  The cash values will generally increase year to year and can provide equity that can provide equity that can be tapped for emergencies, for college funding, for additional retirement funding, or for many other needs, just like home equity.  The growing cash values in the permanent life insurance policy also offer tax advantages because you don't pay income taxes on the growth as long as it stays in the policy.  The earnings are income-tax deferred.  You can say the same about a home in that you don't pay income taxes on any increase in the value of your home as long as you live there.  Once you sell the home, you may have capital gains tax to pay on the growth if the gains exceed allowable levels and the money is not reinvested in another home.

Permanent life insurance also offers a peace of mind security, just like a home.  You know it's always there protecting you from whatever storms may come, financial or otherwise.  Term insurance, on the other hand, eventually will go away go away because the price gets too high to continue.

For more information on life insurance, contact your Absolute Agent today!

September is Life Insurance Awareness Month

You may not like to think about it, but your death can be costly to your loved ones.  At the very least, there will be funeral and burial costs.  There may also be estate taxes and outstanding debts to pay, such as medical expenses not covered by health insurance.  If you have dependents, they will have to cope with these costs while not longer having your income to rely on.

Why buy life insurance?

Many financial experts consider life insurance to be the cornerstone of sound financial planning.  It is generally a cost-effective way to provide for your loved ones after you are gone.  It can be an important tool in the following ways:

• Income Replacement:  For most people, their key economic asset is their ability to earn a living.  Proceeds from a life insurance policy can help supplement retirement income.  This can be especially useful if the benefits of your surviving spouse will be reduced after you death.
• Pay off debts:  Consider life insurance so that you loved ones have the money to offset burial costs, credit card debt, and medical expenses, etc.  Life insurance can (also) be used to pay off the mortgage, supplement retirement savings, and help pay college tuition.
• Estate Planning:  The proceeds of a life policy can be structured to pay estate taxes so that your heirs will not have to liquidate other assets.

How much life insurance do I need?

To decide how much life insurance to buy, you need to first figure out what your goals are in purchasing this coverage.  As yourself the following:

• Do I want to spare my loved ones funeral costs and outstanding debts?
• Am I concerned that my spouse will not be able to continue to pay off the mortgage?
• Am I concerned about college savings for my children or retirement savings for my spouse?

While all situations are different, you will have to purchase enough insurance to provide for their future, while considering how much of your budget should be devoted to life insurance.

Some experts suggest that you purchase 5-8 times your current income.  (However), you will also need to figure how much your dependents will need to pay for in terms of the cost of owning a home, college tuition, food, clothing, child care, nursing home, funeral expenses, and estate taxes.

Your insurance needs will vary greatly according to your financial assets and liabilities, income potential and level of expenses.

Call your local Absolute Insurance Agent to help you determine what is right for your life insurance needs.