While it’s not an easy topic to discuss, each individual must address their mortality. When a loved one unexpectedly passes away, the individuals dependent on them for financial support may be left without provision. Securing coverage for unexpected life events is essential to ensuring the safety and security of loved ones.
Because there are many types of life insurance available, finding the right policy type and coverage for your unique circumstances can seem overwhelming. This article addresses the commonly asked questions about finding the right coverage for every stage of life in Florida.
In This Article
- What is life insurance?
- What does life insurance cover?
- Types of insurance
- How does life insurance work?
- How do I get a quote?
What is Life Insurance?
To be concise, life insurance is a contract between a policyholder (the insured) and the insurance company (the insurer).
The policyholder pays the insurance company policy premiums over a given amount of time in exchange for an agreed upon payment to selected beneficiaries at the time of death. The life insurance policy beneficiaries selected typically include spouses, life partners, children, and other relatives. Life insurance is an investment made to financially support dependents in the event that they are no longer able to provide for them.
Different types of life insurance policies exist varying on the length of coverage offered and investment opportunities, such as cash value which the insurer can borrow against.
What Does Life Insurance Cover?
Life Insurance payouts can be used to cover any expense that beneficiaries deem worthy of expenditure. The compensation is usually used to cover significant expenses, including:
- Home mortgage
- Car payments
- College tuition
- Lost income
- Living expenses
Types of Life Insurance
Life insurance assumes the form of seven to 13 policy types varying by terms of coverage, but generally fall under the umbrella of three key types of insurance policies:
Term Life Policies
Term life policies are aptly named as they are designed to cover a select term of one’s life, typically from one to 30 years. While a term life policy is often less expensive, the individual may out-live their selected policy and lose coverage and subsequent payout.
Whole Life Policies
This form of insurance is also known as permanent life insurance and insures the policyholder throughout the duration of their life. While this policy is more expensive than term life, it guarantees coverage regardless of age, and the death benefit is unchanged throughout the contract’s life.
Universal life insurance
a more flexible whole life policy with more different premium and cash value options. These include guaranteed, indexed, and variable life insurance. If there is a cash value attached, it may be tied to stock market index or a fixed-interest plan.
How Does Life Insurance Work?
Life Insurance secures families against the unexpected. The process of securing this coverage takes the form of six simple steps:
- Calculate your income requirements
- Secure quotes
- Select a plan
- Submit an application
- Get approved
- Activate your policy
Financial experts recommend calculating needs via two methods: (a) multiplying the insured’s salary by 10, or (b) subtract total assets from the summation of long-term financial obligations.
Once the need is assessed, a plan can be selected and tailored to meet priorities. When selecting a policy, one should consider how much the family will need to pay off the remaining mortgage, how reliant the family is on the individual’s income, and how the loss of life will financially impact the future dependents.
How Do I Get a Quote?
The most frequently used method of receiving a quote is to research potential insurance companies and request quotes via submitting forms. Speaking with an insurance broker is also an effective method of securing a quote and selecting a plan. Captive agents provide quotes for policies of one insurance company while independent agents guide individuals through the differences among policies from a variety of insurers. Knowledgeable agents are excellent resources for charting a life insurance plan tailored to specific needs and financial situations.
Other technology has been developed to analyze points of information submitted and match an individual to a policy selected according to specific needs and price point. The individual is presented with multiple suggested coverage plans to select from. While some quota calculation software require the submission of medical exams or blood tests, the majority do not.
Financial Insurance Services Florida partners with Ethos to deliver accurate quotes in minutes. Reach out to one of our knowledgeable insurance specialists to receive a thorough coverage evaluation or a free Florida life insurance quote.