Help Making Life Insurance Decisions
Life Insurance | Table of Contents
What is Life Insurance?
Life insurance is a financial contract between a policy owner and a life insurance insurance company on the life of an insured individual.
When a contract owner pays the required premium, the life insurance company is contractually obligated to provide a death benefit to the contracts named beneficiaries and any other benefits listed in the policy.
Life insurance’s death benefit have the capability to provide critical funds during difficult times to help a family or business continue if a breadwinner dies.
For example, it can help a family pay for things like funeral costs, mortgage payments, and living expenses for many years or even help a business continue if a key employee dies.
Why Buy A Life Insurance Policy?
The main reason people buy life insurance policies is to take care of survivors in the event of a death.
For a family, the death benefit that life insurance provides helps surviving spouses and children continue living their lives with dignity. They won’t be forced to sacrifice their lifestyle due to a financial emergency.
Life insurance is truly a policy bought out of love.
From a business standpoint, life insurance can be designed to provide a myriad of benefits.
The death benefit granted by a policy can provide the business owner with income tax-free compensation in the event a key employee dies. This compensation can be used to offset the loss of revenue the key employee created which will protect both the owner and the other employees who’s jobs would be at risk if the business were to struggle.
Along with the death benefit, the cash value component of whole life and universal life insurance can be used to fund retirement plans for the owner and key employees, be utilized to take advantage of investment opportunities when they present themselves or even buy out a partner’s share of the business when they chose to retire.
Because life insurance death benefits play such a critical role in keeping families and businesses from going into poverty or failing, the government has made them 100% income tax-free regardless of the type of insurance policy you buy.
Many times, term life insurance is the best solution as it provides the most death benefit protection per dollar of premium.
However, permanent life insurance solutions, such as whole life or universal life have additional benefits such as no loss provisions on their cash values, disability premium contributions and creditor protection.
The premium requirements to buy permanent life insurance are higher than those of term life insurance, so it is important to understand how both of these impact your overall financial plan.
Decision Tree Financial is available, at your convenience, to help you navigate the process of buying life insurance. With our help, you can be confident in knowing you are making the best decision for your life insurance plan.
Life Insurance Solutions from Decision Tree Financial
As life insurance brokers, we represent 100’s of life insurance companies across the United States. This allows us to find the best policy at the lowest possible overall cost so you can have the protection you need and money to accomplish the rest of your financial goals so you can ultimately manifest the life you desire.
The (3) Main Forms of Life Insurance Products
Level Premiums and Guaranteed Death Benefit. Term Life Insurance Provides the Most Death Benefit Protection For Your Money.
Permanent Death Benefit Protection with Cash Value and Flexible Premium Potential.
Death Benefit Protection, Guaranteed Cash Value and a Slew of Additional Benefits That Can Be Leveraged To Enhance Your Financial Plan.
Way to Purchase Life Insurance From Decision Tree Financial
Individually Through a Licenced Insurance Agent
A Decision Tree Life Insurance Agent can help you determine the right life insurance plan for your unique situation, facilitate the underwriting process and help you get the coverage you want. Both Personal or Business.
As Part of a Group Life Insurance Plan
If you are a business owner, you can offer life insurance coverage for yourself and your employees with a Group Life Insurance Plan. Plans may offer guaranteed insurability to enrollees and have tax benefits to both employer and employees.
Commission FREE inside an Investment Portfolio…
Certain cash value life insurance can be purchased inside of brokerage accounts which will decrease up-front costs, increase cash value returns and allow flexibility as your life insurance needs change.
Talk to a Professional Licenced Agent at
Decision Tree Financial.
Service After You Purchase Policy From Highly Rated Life Insurance Companies.
Decision Tree Financial is all about relationships. When you buy a life insurance policy through us, you are part of our community. It doesn’t matter if you meet us online or in person, our people will be there to help.
You may need to change your premium payment date because you changed jobs, or you may need to change your beneficiary when your priorities change. Most importantly, we will be there for you beneficiaries IF there is a claim because we understand the importance of not having to worry about money when someone losses a loved one.
How Can Life Insurance Help Protect You?
Life Insurance Frequently Asked Questions
Below are some frequently asked questions about buying, owning and determining what life insurance solution is right for you.
How Much Life Insurance Coverage Should I Buy?
How much life insurance should you buy?
Another question to ask yourself is “How much do I need?” versus “How much do I want?” The answer can be found by imagining the future you want for your beneficiaries.
There are many factors to consider when making this decision.
How large is your mortgage?
Do you have children in college?
How much debt do you have?
What is your annual income?
How long will your spouse or partner need support?
All these factors, and more, play a role in how much life insurance you should purchase. Our life insurance calculator can help to give you a better idea of how much coverage you should consider.
Simply enter your information, and the calculator will provide you with a personalized estimate.
Ultimately, the decision of how much life insurance to purchase is up to you, but our life insurance needs calculator can help to give you a good starting point.
How Much Does Life Insurance Cost?
Life insurance can be very inexpensive for young healthy individuals but increases in price as an individual ages or develops heath issues.
This is because ALL life insurance is priced on a “per $1,000 face amount” based on an individual’s current age and health, sex, and habits at the time the policy was issued.
The amount an individual pays for coverage depends on the type of policy they buy (term, universal, or whole life). Generally, the more coverage purchased and the longer the premium guarantees coverage, the higher the premium will be.
A term life insurance policy is the cheapest and increases in price as the length of the term increases.
Effectively, in a level-term life insurance policy, the owner pays more for coverage during the first half of the policy and less for coverage during the second half of the policy. The excess payments earn interest and are applied later. This is why 10-year term life insurance is less than 20-year term life insurance, all other aspects being the same.
Universal life insurance has the cost of its one year term life insurance deducted monthly from the cash value. Cash value is built through both the premium payments and the earnings the cash value generates from its investments.
The policy owner only pays this cost for the difference between the cash value balance in the policy and the death benefit as a cost per $1,000 of coverage.
Whole life insurance requires the most premium for an equivalent amount of coverage because it has fixed costs and guaranteed cash value accumulation that guarantees the contract will ‘”endow” when the policy matures.
You can visit our Life Insurance Quote Tool to see what coverage for term life insurance will cost here or you can contact us to discuss what you want your life insurance plan to do for you!
What are Life Insurance Living Benefits?
A life insurance contract can offer a number of ‘living benefits” to the policy owner that they can access while alive. These include:
- An Accelerated Death Benefit
- Return of Premium
- Disability Waiver of Premium
- Disability Income
- Cash Value Withdrawals
- Policy Loans
- Policy Surrender Options
- Long-Term Care Benefits
You can hear the story of how living benefits have made a tremendous impact on people’s lives by watching the accompanying video…
Who Can I Name As My Life Insurance Policy's Beneficiary?
At the time the life insurance contract is applied for and issued, there must be a financial relationship between the beneficiary and the insured.
After the policy is issued, any person or organization can be named a beneficiary.
Beneficiaries can be named as follows:
- Individuals
- Businesses
- Trusts
- Estates
- Charities
- Minor Children
- "Classes" (i.e. -Per Capita")
What If I Buy A Life Insurance Policy and Change My Mind?
If you purchase a life insurance policy and decide you no longer want it or want to change the type of coverage, all states grant the new owner a “Free-Look Provision” during which time they can cancel the policy and receive a 100% refund of the premiums they paid without question.
Will Not Paying My Life Insurance Premium Hurt My Credit Score?
No! Not paying, or being late paying your life insurance premium will not hurt your credit score. Life insurance is what is known as a “unilateral contract.” This means that only one party has a duty to perform and that is the insurance company who, if the policy owner pays the required premium, must provide the benefits as described in the contract.
If you do miss your premium, you have a grace period to make them up.
During this grace period, you will still have insurance coverage. However, if you do not make your missed payment before the end of this period, your policy will lapse. If this happens, you will not be insured, and, if you still want coverage, you will need to apply for what is know as a “policy reinstatement.“
The risk to an insured is if the policy lapses, the insurance company may or may not accept reinstatement if you have issues that make you “uninsurable.”
Reinstatement depends on the insurers underwriting guidelines and the insureds current situation.
However, as long as you pay your premium, the insurance company can not cancel your policy for any reason.
Do I need to get "Jabbed" with a Needle to Buy Life Insurance?
Maybe NOT..
Many life insurance companies are forgoing the need to perform a paramedical exam, including the collection of blood and urine, to underwrite and issue new life insurance policies. This all depends on the health history of the individual applying, their age, and the amount of insurance they are applying for. Many times, these policies are issued without any additional cost when compared to policies that do require these exams.
A Decision Tree Financial Agent can help find you a life insurance policy that won’t require you to be “poked with a needle.“
Talk to a Professional Licensed Agent at
Decision Tree Financial.
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