As long as you live, your life will have value, both for yourself and others. Once you pass away, there is no one left to supplant that value in person. That’s why millions of Americans rely on life insurance to leave a financial cushion to support their survivors after they are gone.

Reliable Insurance Managers, Inc. offers diverse life insurance policies that will direct tailored coverage to every policyholder’s personal needs.

What is Life Insurance?

Throughout your life, you will accumulate wealth, and you will use that value to support a family, pay bills, keep a roof over your head and more. If you die, it doesn’t mean that any of these costs will dry up. So, to leave the money behind to help your survivors out, you can use life insurance.

Life insurance places a dollar value on your life, and upon your death the policy will pay that amount as a death benefit to someone you name as the policy beneficiary. Beneficiaries will then be able to use the death benefit to meet their financial needs.

Why do I need it?

A life insurance death benefit usually relates to how much money (or personal value) you might have provided for your family and others had you remained alive. Therefore, policies might:

• Provide income replacement when your paycheck disappears at death.
• Help spouses pay off debts, mortgages or related costs.
• Establish a trust fund to support a child’s upbringing or education costs.
• Cover the cost of care for a disabled relative in trust.
• Enable a charity endowment.

All in all, the benefit of having life insurance on yourself is that you won’t leave your family in a bind in case of your death, regardless of whether it was an expected or unexpected passing.

Term-Life vs. Whole-Life Policies

There are several types of life insurance out there. The best-known are term- and whole-life insurance.

What is term life insurance?

Term life policies last for a term—a certain number of years. So, when you enroll in coverage, you’ll decide on a term like 5 years, 10, 20 or even longer.

How does term life insurance pay out?

If you die during the term policy’s period, then the policy will pay the death benefit. If you don’t die, then you might choose a new policy, or simply drop coverage. Sometimes, you can recover some or all the premiums you paid over the term if you qualify for a return-of-premium term policy.

What is whole life insurance?

Whole-life policies have no terms. Once you enroll, you will be able to keep the policy active for the rest of your life, regardless of how long you live. As long as you pay your premium, you’ll have the policy.

How does whole life insurance pay out?

Besides their primary death benefit, whole-life policies often offer cash value benefits.

With a cash value policy, a portion of your premium acts as an investment, and the returns accumulate over time. You can withdraw it, use it to pay the premium on the policy, or you can even trade the accumulated cash value with the insurer for a higher death benefit.

There are several types of life insurance that closely relate to whole-life policies, such as: universal life, variable life, variable-universal life, simplified issue, and guaranteed issue. These policies usually offer death benefits and cash value options, but they also differ among themselves.

Which is better? Term or whole-life insurance?

Consider some of these factors when determining whether whole- or term-life policies are best for you:

Term-life policies are often less expensive than whole-life policies, and sometimes, those with health issues or disabilities might qualify more easily for term policies.

Still, term-life policies do not accumulate cash value. They also don’t last forever. If you want the extra security, but at an extra cost, you might find whole-life policies appropriate.

How much life insurance should I buy?

There are a couple of ways you can set your policy’s premiums.

• Often, you can calculate a preferable death benefit by multiplying your salary for a term of years. If you want to leave 5 years of a $100,000 salary, you’ll need a $500,000 death benefit.
• If you want the money to go to a certain purpose, such as a mortgage, you can tie the death benefit to at least that value.
• If you want a high-value policy, remember that the more you buy, the more coverage may cost.

Reliable Insurance Managers, Inc. is more than happy to help you address all your life insurance needs. Our dedicated agents can help tailor your policies to make them fully-responsive to your needs.

Life Insurance FAQs

Do I Have to Get a Medical Exam?

Most life insurers ask applicants to get a medical exam, because health ties to their risk of death. While some policies don’t require exams, they are often more expensive.

What’s Final Expense Insurance?

You might not want a full life insurance policy. However, you might want assistance available to help final expenses. A final expense policy is similar to your life insurance. It offers a smaller payout than most death benefits, with fewer other perks. However, it can help with bills like funeral costs.

Is Life Insurance Taxable?

In many cases, the death benefit is not taxable. However, there are situations where you will have to pay tax. This often arises when you receive cash value from a policy as income.

Additional Resource: 

• When should you start shopping for long term care insurance?
• Updating your life insurance in 2012
• The value of accidental death coverage