Life Insurance

1
Life Insurance

• Why and When
• Do I Need It?

2
Life Insurance

• Life insurance is a contract that pays a
  beneficiary in the event of your death as long as
  the policy is in effect.
• Life insurance is something you buy for those
  people you leave behind. Life insurance covers
  your expenses such as funeral and medical bills.
  You may also need to leave financial support to
  your family.

3
Who Needs It?

• If your
• Single - Consider life insurance for retirement
  and estate planning.  And if youre young and
  healthy, now may be the best time to lock in a
  low rate.
• Married or Getting Married - You are not in this
  alone anymore. Your spouse depends on you in lots
  of ways.  Losing you to an accident or illness
  would be a huge emotional loss for them. Having
  the right amount of life insurance can help make
  sure its not a huge financial loss as well.
  Isnt it important to help secure your familys
  future?
• Buying A Home - Buying a home is one of the
  biggest purchases you may ever make. Did you know
  that life insurance can be used to help pay off
  your mortgage and keep your family in their home
  should something happen to you?

4
Types of Life Insurance

• Basically there are 2 types of life insurance
• Term
• and
• Whole Life

5
Term Life Insurance

• Term Insurance The most basic and least
  expensive type of life insurance. You buy
  coverage for a certain amount of time, such as
  10, 15, 20 or 30 years. If you die before the
  term is over, your beneficiary gets the benefit
  stated in your policy. If you live beyond the
  term, the policy expires. 
• Therefore, if you purchase a 30 year term
  policy at the age of 20 you will not have any
  life insurance beyond the age of 50

6
Whole Life Insurance

• Whole life or Permanent Insurance This type of
  policy never expires. As long as premiums are
  paid, it remains in force. Premiums are usually
  based on your age at the time of purchase and
  generally remain level. In addition to providing
  a death benefit, premiums are also invested to
  produce returns adding cash value to your
  policy. There are three major types of whole life
  or permanent life insurance traditional whole
  life, universal life, and variable universal life.

7
Types of Whole Life

• Traditional Whole Life You'll pay the same amount
  of premium for the rest of your life. (Start
  young and the less expensive the premiums will
  be.) Your cash value will accumulate based on a
  guaranteed rate. As long as your policy is
  current, you can borrow against the cash value at
  the current policy loan interest rate.
• Universal Life gives you more flexibility. You
  pay a set initial premium, but after that, you
  decide when and how much you want to pay. How
  does this work? The insurance company simply
  charges the insurance cost from your cash value
   account.
• Variable Universal LifeThis insurance combines
  some features of policies to create a more
  flexible life insurance product. As with
  universal life policies, you decide, after the
  initial premium, when and how much more you want
  to pay into your policy. You can adjust the death
  benefit, plus you have the wide range of
  investment options. Your cash value  will
  increase or decrease, depending on the
  performance of the underlying funds.

8
Filing a Claim

• Unfortunately, someday you may
• responsible for dealing with the
• loss of a loved one.
• What are the four steps in filing a claim?
• 1. Obtain several copies of the death
  certificate.
• 2. Contact your insurance agent.
• 3. Submit a certified copy of the death
  certificate (or acceptable alternative in
  extraordinary circumstances) from the funeral
  director with the policy claim.
• 4. Once a life insurance claim is submitted, you
  will need to determine how the proceeds will be
  distributed.

9
Settlement Options

• In some cases there are four settlement options
• Lump sum You receive the entire death benefit in
  a single amount, which allows you to use what you
  need for immediate expenses and invest the rest. 
• Specific income provision The life insurance
  company pays you both principal and interest on a
  predetermined schedule. 
• Life income option You receive a guaranteed
  income for life. The amount of income depends on
  the death benefit specified in the life insurance
  policy, your gender, and your age at the time of
  the insured's death. 
• Interest income option The company holds onto
  the proceeds and pays you interest. The death
  benefit remains intact and goes to a secondary
  beneficiary upon your death.

10
Medical Exams?

• Why do life insurance
• companies generally require
• medical exams?
• You will be classified based on age, height,
  weight, nicotine use and other health factors,
  such as any history of high blood pressure or
  depression. Your health status will determine
  what rate class category you fit in, so even if
  you have some health problems, you could be
  covered.

11
Rating Class

• The rating class that you fit into will determine
  the price you pay in premiums.
• As you can guess, a smoker
• will pay a higher premium than
• a non-smoker and an over-weight
• person will pay more than a thin person.
• Buying insurance when you are younger, healthier
  and a non-smoker will save you money in many ways.