The COVID 19 pandemic has created a lot of uncertainty and anxiety. Recent studies suggest that a third of all consumers who have been shopping for life insurance are doing so as a direct result of the pandemic. Despite the heightened interest in obtaining life insurance, almost fifty percent of consumers still do not have a policy in place.
The insurance industry has had to pivot and become more creative with policy underwriting, in many cases streamlining the process for consumers. Many insurers now use a hybrid format, and in some cases utilize online platforms to underwrite rather than relying solely on in person models. The good news is that these changes often make it easier to obtain life insurance to provide protection for your loved ones when you are no longer able.
Deciding on a policy type and level of coverage can be daunting. Before you get started, check out this glossary of life insurance terms that will help you navigate the process with ease.
Who should get life insurance?
The short answer is – Everyone! Regardless of your age or stage of life, it is important to have a policy that will provide for anyone who depends on you so that they will be financially secure. An insurance payout can help to defray the costs of daily living for your loved ones, cover funeral expenses or pay off loans or mortgages. Whatever the need, life insurance can provide a safety net that reduces worry and stress.
What are the types of life insurance?
There are two basic types of life insurance that you can purchase.
Term insurance usually carries lower premiums as it is in force for a set term or time period. Many consumers opt for a term between 10-30 years during the time they are raising children, paying off college debt or a mortgage.
Permanent insurance usually remains in effect for your lifespan. It typically has a higher premium rate than term because it pays a death benefit and typically also has a cash value that you can possibly access.
Some people may opt to have just term or permanent policies, while others may opt for a combination of the two.
What is the process for obtaining life insurance?
In order to become insured, you will go through a process called underwriting. Sometimes consumers need to fill out paperwork and participate in a medical exam to determine risk and eligibility, which is called traditional underwriting. In a simplified underwriting process, the insurance company often waives the medical examination requirement if you answer a series of questions. The amount of coverage you can obtain is based on a variety of factors, and it is determined during the underwriting process.
How much life insurance do you need?
It can be difficult to anticipate what the value of your policy should be. To begin, you need to consider the expenses that your loved ones will incur and estimate the value of the resources that will be available to them in order to determine your anticipated policy amount. This calculator can help you to determine the amount that is best for you.
Is life insurance expensive?
The cost of a policy depends on many factors such as your age, health, type of policy and how much coverage you purchase. Don’t let your age or possible health conditions deter you from exploring life insurance options. There are a variety of policies available for people of all ages and levels of health.
How do life insurance pay outs work?
When a loved one dies, it is difficult for family and friends to work through the grief, let alone navigate the process of accessing an insurance payout. It’s helpful to understand ahead of time exactly how the process works.
This overview of the payout process provides an extensive list of considerations and cautions for beneficiaries so that they can focus on what matters most, healing during a difficult period of time.
Working with a Bankers Life representative can help you to choose the right insurance policies. A Bankers Life representative can be by your side every step of the way helping you to navigate the process. Learn more about our services here.