Life insurance works like any other insurance. You have to pay your premium and sign a policy that binds you and your insurance company in an agreement where when grim things happen like death itself, then a death benefit will be given to your dependents termed as beneficiaries.Many people talk about life insurance and why it’s important, but there are still many misunderstandings regarding life insurance policies. Many people aren’t sure if they need life insurance, and if they do- how much insurance is necessary? What kind of insurance?

Who Needs Life Insurance?

First of all, most people believe life insurance is taken out to pay for the burial expenses of the policyholder. And while this may be part of the reason people obtain life insurance, this is not what the insurance coverage is intended for! Life insurance is meant to replace the income that is lost by the policyholder’s death, and to be used to pay for the needs of the deceased policyholder when you are no longer earning money to do so. If you have children or relatives who depend on your income, then you should have life insurance.

For young, single individuals with no dependents, there is really no need for life insurance. If you are an older individual with retirement savings or pension, it may not be necessary to have life insurance on top of the money that would become available to your spouse from your savings and pension.

Stay at home parents might think they don’t need life insurance policies as they’re not earning wages, but this is not the case. Consider how much it would cost to hire people to do all of the daily tasks you do- from day care, to housekeeping to financial management to grocery shopping, errand running and cooking. If you have a special needs family member, what would it cost to have special care arranged if you were not able to do it? Life insurance for a stay at home parent would allow the family to hire people in the event of your death to continue on doing the things you were routinely doing for the family.

As the wage earner of a family, your life insurance should replace your salary, plus pay off the mortgage, college tuitions for kids, or maybe career training for a spouse who might have to re-enter the workforce upon your untimely death.

Once you’ve determined you should have life insurance, your next step is to figure out how much life insurance you need. Having an estimated figure in mind will make it easier to select the appropriate life insurance policy.

Life Insurance Agents

Buying life insurance is similar to buying car insurance. You work with insurance agents who will help you weigh the options and make a decision as to the type of policy you should have. When searching for life insurance agents, you will want to talk to at least three different agents in order to make sure you get a good understanding of the options available. Shopping around is important.

If at any point while talking to a life insurance agent about the different policy options you feel like they are rushing you or pressuring you to buy a larger policy than you need, or they simply aren’t taking the time to explain things to you, it is in your best interest to walk away. Life insurance agents are supposed to explain the options and help you understand your own needs and how life insurance can help- then back off to let you make your own decisions pertaining to the type and amount of insurance policy you wish to carry. These are important considerations because many life insurance agents are paid on commission, so it is in their tendency to push higher priced policies on consumers.

MyLifeAtAIL is a blog where American Income Life Insurance Company Agents can post to share tips, experiences and success stories with the AIL community.
With just $25,000 of borrowed capital, Bernard Rapoport founded American Income Life Insurance Company more than 50 years ago. Today, American Income Life has become one of the nation’s largest providers of supplemental life insurance to labor unions, credit unions, and associations. American Income provides coverage to over two million policyholders and represents over $100 million in annual insurance product sales. Their company’s growth has been sustained through high customer satisfaction, innovative lead programs, word of mouth referrals, and one of the most lucrative Agent compensation programs in the industry.

As life is unpredictable, one needs to plan for the future and to take care of the financial security of one’s family by purchasing a suitable life insurance policy. Professionals accentuate that life insurance gives financial security to a family. The other terms used for life insurance are life cover and life assurance.

Why Do You Need Life Cover?

Life cover is designed to provide financial protection for your family if you should die or, with some policies, for you too if you are diagnosed with a terminal illness. The last thing your family will need to worry about, if the worst should happen, is whether or not they can afford to remain in the family home, let alone keep up their current lifestyle. A lump sum payment doesn’t make up for the death of a treasured parent, but it does mean that your children will not have to go without the necessities of life.

Get Affordable Life Insurance When You Are Young

Finding affordable life cover may be problematic for a young family – this is a time when money is often tight. However, this is also the best time to purchase life insurance. When you’re young and healthy, premiums are inexpensive, and this is the best time to take advantage of the fact that premium costs will only increase as you age. Worse yet, if you develop a medical condition later in life, you may end up with soaring premium costs, or even be uninsurable. You never know what might happen tomorrow, or next year, or in ten years time, and life insurance is all about protecting you and your family against anything that life throws at you.

Other Important Factors to Consider

Giving your family the best protection means carefully considering all your available cover options. Choosing between a joint policy for you and your spouse, or two separate policies, is definitely a less expensive option, but in the long term it can prove to be a disadvantage as the policy terminates after one claim is made, leaving the other partner unprotected, and if they’re over forty or in poor health, getting new cover will prove expensive.

If someone depends on you financially, chances are you need life insurance. Think about it, if you were no longer there to provide for your family, the financial implications for them could be considerable. The lump sum benefit could be paid to your family to help them manage major household debts such as the mortgage, car repayments or education costs for your children.

Of course life insurance isn’t just for the main breadwinner. If you or your partner takes care of the home and children and you were to pass away, it could mean significant additional expenses to keep the household going, such as childcare and housekeeping. That’s why Real Insurance offers the flexible Joint Plan where you and your partner can be insured on one policy and you can each select your individual benefit amount.

Family Life Cover pays your chosen benefit as a lump sum to you or your beneficiaries in the event of your death or terminal illness. It’s pure life insurance with no fancy frills – providing a substantial amount of cover – from $100,000 up to $1 million – at a reasonable cost. The cash could be used to help your family manage major household debts such as the mortgage, car repayments or education costs, making sure the lifestyle that you are working hard to build for your family today, is protected in the future.