How Do I Know If I Need Life Insurance?

If you died tomorrow, how would your family pay for your funeral and burial costs, outstanding medical bills, and any other outstanding debts? How would they pay for their ongoing living expenses, such as food, utilities, and a mortgage?

Life insurance is a safe, simple way to guarantee that the people who depend on you will be taken care of after you’re gone. Beneficiaries receive a tax-free cash payment that ensures their standard of living and way of life do not suffer. So please, don’t make a tragic situation worse by failing to plan now. If you are the primary earner in your household, life insurance is not an option. It’s a responsibility.

Contact your Sarvey Insurance agent to discuss your life insurance options today.

Life Insurance FAQs

How Do I Know How Much Coverage I Need?

No “one size fits all” policy is suitable for everyone because no two people have precisely the exact needs. For example, an elderly widow who only wishes to pay for her burial expenses would require a much different policy than a 40-year-old who is the primary earner in a family with children.

While experts disagree on the exact formula for income replacement, most estimate that, at a minimum, a person needs coverage equal to six times their annual income. So ultimately, the only “wrong” answer is no coverage.

Contact your Sarvey Insurance agent today, and they can assist you with balancing future needs with your current financial capabilities.

What’s The Difference Between Term And Permanent Life Insurance Coverage?

Term Life insurance is the most affordable type because it only provides coverage for a limited period. Policies vary, though, and can range from five to thirty years. As long as the policyholder dies within the period specified in their policy, the insurer must pay the benefits in full.

The risk with buying term life insurance is that the policyholder may “outlive” the coverage. When this happens, the policy terminates, and you are given the option to renew. However, the new premiums will undoubtedly be higher because you have aged. Still, term life insurance is an attractive option for many people because it allows them to buy coverage at a lower cost and when needed most.

On the other hand, permanent life insurance offers lifetime protection as long as you continue to pay your premiums. All age groups can take advantage of the security and peace of mind that permanent life insurance offers. Retirees can guarantee that their loved ones will be provided for after they are gone, and young people looking to start a family can take advantage by buying early and locking in at a great, low rate.

Sometimes, a combination of both term life and permanent coverage is desirable. Contact your Sarvey Insurance agent today to determine which solution is best for you.

Can I Borrow Money Against My Life Insurance Policy?

One of the most significant differences between term life and permanent life insurance is the ability to borrow money. Only permanent insurance allows the policy holder to take out a loan against the cash value built up in the policy. Policy holders are required to repay this loan, including interest, and any outstanding balances owed at the time of death will be deducted from the death benefit.

On the other hand, term life insurance policies do not have a loan option available because they do not accrue cash value. This is why these policies are commonly referred to as “Death Benefit Only” policies.

Can The Same Person Have More Than One Life Insurance Policy?

Currently, no laws restrict the number of life insurance policies one person can hold. Individuals can also purchase policies from as many companies as they want. Frequently, a person will purchase an individual life insurance policy to supplement the one they receive through their employer. No policy cancels another policy out, and all effective policies will be paid concurrently at the time of death.

Is A Physical Exam Always Required To Obtain Life Insurance?

Not all life insurance policies require a physical examination. However, policies that pay a high death benefit usually do. A paramedic or licensed health care worker typically performs this physical in your home. Most exams include a height and weight check, blood and urine samples, and an EKG. You will also need to be prepared to answer questions relating to your medical history. In some instances, additional documentation such as a credit history and your driving record is required.