whole life insurance

What Life Insurance Is Best?

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Forty-six percent of people living in the U.S. do not have life insurance. And one of the top reasons they do not have it is not knowing which insurance to get. If you are comparing life insurance companies and policies, how do you know which life insurance is best for your needs?

Which Life Insurance Company Is Best?

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The best life insurance companies offer resources to help you understand your policy and when you need to adjust it. A stable life insurance company has a long, reliable history of providing policies and paying out death benefits.

Although many life insurance companies use names that convey strength, the Insurance Information Institute recommends verifying the company’s full name, location, and affiliation with other companies.

Also, research to find these facts about a company:

  • Identity
  • Reputation
  • Ethics
  • Financial status
  • Product range

What is the quality of customer service?

Choose an insurance company that makes it easy to learn about the types of life insurance policies available and get help understanding them.

Look for these services:

  • A comprehensive selection of policies
  • Online articles and educational resources
  • Online insurance calculators
  • Accessible, knowledgeable, personalized customer service

What Is the Best Life Insurance Policy for You?

The best life insurance satisfies your reasons for purchasing a policy. Find a policy that fits your budget and offers enough coverage to care for your surviving dependents. The National Association of Insurance Commissioners advises that you select a policy that provides enough coverage based on your age and financial responsibilities.

Look for a plan that offers enough coverage to satisfy your potential needs:

  • Replace up to ten times your income
  • Pay off debt
  • Care for aging parents or disabled dependents
  • Pay for children’s education

Term or permanent life insurance?

Term life insurance is in effect for a limited period, or term. Terms are set in increments of five (5, 10, 15 years, etc.) and can last up to 30 years. A whole life insurance policy lasts your entire life and builds cash value over time.

Before you purchase an insurance policy, ensure it fits your needs based on these factors:

  • Your age
  • The policy type and features
  • The amount of insurance you are purchasing
  • Cost of premiums

Many insurance policies offer riders—add-ons to enhance your policy. But riders will increase your premiums. Please read the post, Term Life vs. Whole Life Insurance – How to Decide for a comparison of term and whole life insurance.

In Raleigh, John Hunt of Hunt Insurance offers personalized assistance to help you identify an insurance policy that fits your needs and budget. Contact Hunt Insurance by phone or e-mail to request a consultation and a customized quote.

How Does Life Insurance Work?

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If you understand how life insurance works, it will help you decide if you need insurance, how much you need, and the type of plan you want. Without understanding the facts, you can over- or underinsure yourself—or do nothing at all. So how does life insurance work?

How Does Life Insurance Work?

Life insurance works by entering a contract with an insurance company. You will make regular payments (premiums) to the company for a life insurance policy that will pay a tax-free death benefit, or payout, to your beneficiaries if you die.

Do You Need Life Insurance?

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You might need life insurance to leave enough money to help your spouse, partner, children, or other dependents pay for expenses if you are no longer living.

Some potential expenses include:

  • Debt
  • Education
  • Everyday living expenses
  • Funeral and burial expenses
  • Income replacement
  • Mortgage
  • Out-of-pocket medical care

What are the Types of Life Insurance?

The main types of life insurance are term life insurance and permanent life insurance.

What is term life insurance?

Term life insurance is effective for a specific term, usually in increments of five years. When the period ends, so does the policy. But you may be able to renew it or convert it to a permanent life insurance policy.

Types of term life insurance

  • Level term – Premiums stay the same throughout the term
  • Increasing term – Premiums increase as you age

What is permanent life insurance?

Permanent life insurance does not have an expiration date. But lifelong coverage costs more than term life insurance.

Types of permanent life insurance

  • Whole life – It is valid for your whole, or entire, life and has a cash savings component. Your premium payments insure you for a specific death benefit. Unused cash savings are not included in the death benefit.
  • Universal life – The policy allows you to increase your death benefit, adjust your premiums, and combine cash value with your death benefit to increase the payout.
  • Variable life – You can authorize your insurance company to invest your cash value in an account that the company manages. And you can use the investment earnings toward your premiums or the death benefit.
  • Variable-universal life – You can adjust your premiums within the limits the insurance company specifies. And you can choose how to invest cash accumulation—which may result in gains or losses.

For a comparison of term and permanent life insurance, read our post: Term Life vs. Whole Life Insurance – How to Decide.

How Much Life Insurance Do You Need?

How much insurance you need depends on your survivors’ immediate expenses, long-term expenses, and the financial resources you already have. But many experts recommend that you multiply your annual gross income (before taxes) by 10 to 15. Ten to fifteen times your yearly income will give you an idea of the death benefit you need to care for your dependents.

Read our post, How Much Life Insurance Do I Need?, for details on the expenses to include in your calculation.

Can You Get Life Insurance If You Are Not Healthy?

Up to 50 percent of non-elderly Americans have a chronic illness. If you are one of them, you may wonder how your health will affect your chances of getting life insurance. But chronic illness does not automatically disqualify you from getting the coverage you need. Even a history of serious illness might not disqualify you. But it can increase the cost of your life insurance premiums.

For details on how your health affects your ability to get life insurance, read our post Can I Get Life Insurance Regardless of My Health?

Which Insurance Company Should You Choose?

With so many choices, how do you know which life insurance to choose? Look for a financially stable company with a long history of providing policies and paying death benefit claims. Although scores of high-quality life insurance companies exist, exercising caution always helps.

For easy-to-understand tips on selecting a company and policy that is right for you, read our post, Which Life Insurance Is Best?

Do You Need Help or Have Questions?

You are not alone. According to a Motley Fool article, one reason people say they do not have life insurance is not knowing what kind of policy to get. Hunt Insurance of Raleigh, NC, can help you navigate the decision-making process. Call or text us or complete our contact form to schedule a consultation or get a free, customized quote.

Term Life vs. Whole Life Insurance – How to Decide

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Trying to decide whether to purchase term life or whole life insurance? Although term life insurance is the most common selection, which one is right for you? After you understand the difference, it will be easier to select a policy.

What Is Term Life Insurance?

Term life insurance provides coverage for a specific period or term. Coverage periods are usually offered in increments of five years—usually between ten and 30 years. When the term ends, you can renew the policy, convert to a permanent policy, or let the policy expire.

  • Premiums – Your age, health history, lifestyle, the term length, and the amount of coverage you want will affect your premiums. Term life insurance monthly premiums are less expensive than permanent life insurance premiums.
  • Payout – Your beneficiary is guaranteed a payout if you die during the term of your policy.
  • Cash value – Unlike permanent life insurance, term life doesn’t build cash value.

What term length should you choose?

Consider a policy that provides coverage until your dependent children, if any, have completed college and live on their own. At the end of the term, if you have fewer dependents, you can lower your coverage amount and save money on premiums. Or you can select a term that lasts until you retire if you’re leaving your retirement income to a beneficiary and can reduce your life insurance coverage.

What Is Whole Life Insurance?

Whole life insurance is a type of permanent life insurance. It provides coverage for your entire—or whole—life. Your beneficiary will receive a payout when you die. And the policy includes a use-it-or-lose-it cash savings account that accumulates over the years as you pay premiums.

  • Premiums – Your age, health history, lifestyle, and insurance coverage amount will affect your premiums. Whole life insurance monthly premiums are higher than term life premiums—five to fifteen times higher.
  • Payout – If your premium payments are current, your beneficiary is guaranteed to receive a payout.
  • Cash value – Whole life insurance builds cash value over time. It’s a tax-deferred “living benefit” for you. If you die, your beneficiary will receive the death benefit, but the cash value will return to the insurance company. 

It takes time to weigh the facts and decide which policy is best for you. Our post, Whole Life Insurance Policy – 5 Questions to Ask First, gives details on what you should consider before selecting whole life insurance.

How Much Life Insurance Do You Need?

Think about how much life insurance is needed to replace your income and care for your beneficiary and dependents if you die.

  • Some experts recommend that you purchase life insurance that equals ten to 12 times your annual income.
  • Other experts advise that you multiply your annual income times the number of years left until you retire.
  • If you have a stay-at-home spouse, consider the cost of caring for your children or home if your loved one predeceases you. Get life insurance for your spouse, too.
Infograph to highlight the differences between term and whole life insurance; from Hunt Insurance of Raleigh

Term Life vs. Whole Life – Five Questions to Ask Yourself

Take another look at the differences between term life and whole life insurance. Ask yourself the questions below. Confirm your reasoning with a licensed insurance agent who can help you compare your options, costs, and the long-term effects of the type of insurance you choose.

  1. How many family members will depend on my income for my entire life?
  2. Do I have debt that limits what I can afford to pay for premiums each month?
  3. What is the value of my assets and estate? Am I subject to an estate tax that I can pay with the tax-deferred cash value of a whole life insurance policy?
  4. Will I have enough savings to self-insure at the end of my term life policy, or will I need to renew or convert it?
  5. Do I have valid reasons to pay higher premiums for whole life insurance that builds cash value? Or can I invest elsewhere and get a higher return?

Start the conversation with Hunt Insurance of Raleigh-Durham, NC. Contact us today.

What Happens to Your Life Insurance If You Leave Your Job?

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If you leave your job, what happens to your life insurance depends on the type of plans your employer offers. Group life insurance—or employer-sponsored insurance—can have options to port or convert your plan. But not all plans have these features.

Life Insurance After You Leave Your Job

Whether or not you can keep your life insurance if you leave your job depends on the conditions of the insurance plan. Conversion and portable plans allow you to retain at least a portion of the insurance.

Conversion

Some group life insurance policies allow you to convert to an individual plan if you leave your job. You can convert without a physical exam or medical questionnaire. Common options are whole life or universal life insurance.

  • Whole Life – The insurance will be in effect for your entire—or whole—life. The premiums are fixed and won’t change with your age or declining health. Although premiums are higher than term life insurance, your policy can build cash value. You can borrow from the accumulated cash value or use it to pay insurance premiums.
  • Universal Life – Universal life insurance combines affordability with permanence. It offers the lower premiums of term insurance, but like whole life insurance, it lasts for the remainder of your life. The plans your employer provides may—or may not—build cash value.

Portability

Portability allows you to continue your life insurance plan if you’re laid off or voluntarily leave your company. You’ll have term life insurance protection for a period that is specified by your plan. Depending on the policy, you can take all or a portion of the coverage after you leave your job. The plan might specify—in dollars—the minimum and maximum amount of coverage that you can continue for yourself, your spouse, or a child.

If Neither Option Is Available

If your employer offers life insurance that cannot be converted or ported, you lose your coverage when you leave your job.

Is Employer-Sponsored Life Insurance Enough?

Eighteen percent of consumers only have group life insurance coverage that is employer-sponsored. Two factors can help you determine if your employer-sponsored coverage is enough:

  • Portability or conversion – If your employer offers life insurance that you can’t convert or port after you leave the business, consider purchasing additional coverage. Ask the human resources team at your job about the cost of premiums if you separate—voluntarily or involuntarily. It may be less expensive to purchase a personal term life insurance policy.
  • What’s needed to sustain your survivors? – Funeral expenses, replacement income, education costs, and more can affect how much money you want to leave your beneficiaries. For a list of current and anticipated expenses to consider before you buy an insurance policy, read our blog post, Did You Buy Too Much Life Insurance? What Now?

John Hunt, insurance agent and owner of Hunt Insurance of Raleigh, Durham, and Chapel Hill, sponsors this post. Call us for a hassle-free quote: 919-840-8418.

Life Insurance – No Exam Required

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Getting Life Insurance With No Exam Required

Photo of a stethoscope, clipboard, and medical form for Raleigh-Durham, NC life insurance without an exam for Hunt Insurance.That’s the preference for most people. Explore your options, apply for life insurance, and receive it without an exam. If that’s how you feel, there are a few things to consider.

Factors to Consider for Exam-Free Life Insurance

In many cases, you can get life insurance without an exam. There are options in term and whole life insurance. Your agent can explain the details. Below are some of the factors to consider.

Term Life Insurance without a Medical Exam

Term life insurance provides coverage for a limited period of time, or term, usually between ten and thirty years. When the term expires, you will need another policy, unless you have a policy that is renewable or that can be converted to whole life insurance. There are few things to consider, though, and we’ll talk about some of them.

  • Age – Most often, plans are available for applicants who are between 18 and 70 years old.
  • Premiums – They are based on the age of the person being insured. When the term of the policy is over and you need another policy, the rates may significantly increase, based on your age. Depending on your plan, premiums may be level for the entire term, increase after a specified time, or gradually increase. Premiums increase, because as we age, we are more expensive to insure.
  • Health History – A review of your health history will likely be required.
  • Occupation and Lifestyle – The nature of your job and the health risks involved, as well as any hobbies you have that may be extreme, can affect the cost of your premiums and the insurance you qualify for.
  • Limited data gathering – At times, a urine sample may still be required.
  • Coverage amount – There can be a cap on the amount of insurance you can get without an exam. The amount varies, depending on the insurance provider.
  • Cost – At times, your premiums will be higher than they would be if you consent to an exam.
  • Limitations – The policy main have limitations for an initial period.

There are different options for term life insurance. Find an experienced agent to discuss them.

Whole Life Insurance With No Exam

There are insurance companies, some often advertise on TV, that offer whole life insurance without an exam. Some even advertise guaranteed coverage. What are the limitations? Consider some of them.

  • Age – An age range for qualification will be specified. Many plans are offered up to age 75.
  • Coverage – It’s limited, and it’s usually under $100,000.
  • Premiums – They are based on the age of the insured. If you don’t have a level premium plan, the cost will increase as you age. The older we get, the more it costs to ensure us. Premiums will initially cost more that term insurance, but will be less costly than having to renew a term plan or change plans after the plan expires.
  • Health History – A review of your medical history will likely be required.
  • Occupation and Lifestyle – If you have a job that puts your health at risk, or if you have risky, extreme hobbies, they will be factored into the cost of your insurance.
  • Limited data gathering – You may need to provide a urine sample.
  • Coverage amount – There may be a limit on the amount of insurance you can get without an exam. This will vary, based on the plan and insurance company.
  • Cost – Your premiums may be higher than they would be if you had an exam.
  • Limitations – For a specified period, the policy may have limitations.

Whole life insurance has different options. Discuss them with an experienced agent and weigh the pros and cons.

Do You Really Need Insurance Without An Exam?

Maybe. It depends on the coverage amount you want, your age, your health, and other factors. If you’re healthy, good results from an exam can result in lower premiums. If you’re nervous about having an exam, ask your agent what’s involved, how long it will take, and what qualifications the examiner has. The final decision is yours, of course. Get quotes from two or three insurance agents to discuss your options—with and without an exam.

This post is sponsored by Hunt Insurance of Raleigh, NC.