Your Life Insurance Broker
If you are an adult with a family, then you likely have people that depend on your income to survive and thrive. If you were to suddenly die, then what would happen to them? Life insurance is a safety net that is meant to take care of the people that depend on you in the event of your premature death. In exchange for a premium that you pay every month, an insurer will guarantee that your dependents will receive a (typically large) sum of money if you pass away. Life insurance comes in two main forms, with different associated costs and risks: term life insurance and permanent life insurance.
Life Insurance Definitions
The dollar amount paid to have coverage. This can be paid monthly, quarterly, bi-annually or annually and is necessary to keep the policy active.
Also known as the benefit amount. This is what the beneficiary will receive if the insured person were to pass away while the policy is active.
Term Life Insurance
A type of life insurance that lasts for a set period of time. Typically between 10-30 years.
Permanent Life Insurance
Type of life insurance that will run until the insured person passes away. This guarantees payout to the beneficiary.
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Life Insurance 101
Life Insurance Components
There are 3 main components of life insurance: death benefits, premiums, and cash values.
- Death Benefit: The death benefit is the flat monetary value that the insurance company agrees to pay out to the beneficiaries in the event of the policy holder’s death. The amount paid is agreed upon when the policy is established and depends on multiple factors, including the income of the policy holder and their relationship with the beneficiaries. The death benefit is not counted as taxable income, so the beneficiaries will not have to pay any taxes on it.
- Premiums: Premiums are what a policyholder pays to maintain their policy. Premiums come in the form of a monthly or annual payment. The insurance provider is contractually obligated to pay the death benefit if the policy holder maintains their policy and pays their premiums.
- Cash value: Some permanent life insurance policies allow the policy holder to use their death benefit like a savings account. They can take out a loan against it, borrow money from it, invest it, and more. Best of all, it’s all tax deferred. This is known as the “cash value” of a policy. There are numerous benefits to acquiring a policy with a cash value. However, unlike the death benefit, the cash value is no longer available after the policy holder dies.
Term Life Insurance
Term life insurance is the most popular form of life insurance, making up 71% of all policies sold. These policies tend to be more affordable than permanent life insurance policies.
Term life insurance lasts a set amount of time: typically, 10, 20, or 30 years. If the policy holder dies in that period, then the policy will pay out. If they do not, then the policy ends.
There are a few different policy types within the term life bubble:
- Renewable term: Renewable term life insurance is a term policy that provides the insured with a short-term policy that is essentially “revisited” after the term ends. For example, if someone has a 5-year renewable term policy, then they will be quoted a premium price for the next 5 years. At the end of that 5-year period, the insurance company and the policyholder will revisit the policy and determine a new premium rate.
- Decreasing term: A type of renewable life insurance in which coverage decreases over the course of a lifetime at a predetermined rate.
- Convertible term: A type of term life insurance that gives the policy holder the option of converting the policy to a permanent life insurance policy at the end of the term.
Apollo Insurance agents are knowledgeable about term life insurance policies and can help you find the right policy for you. Contact us or fill out the form below for a free consultation.
Permanent Life Insurance
Permanent life insurance is just that – permanent. It stays in effect through the policy holder’s entire life as long as they pay their monthly premiums. The premiums are set at the start of the policy and are based on the insured’s health and age at that time. There are several different policies that fall under “permanent life insurance”:
- Whole Life: A policy that covers the insured for the entirety of their lifetime and provides some cash value, allowing the insured to withdraw funds or borrow against the policy.
- Universal Life: Provides the opportunity for flexible premiums, unlike other life insurance policies. Typically provides cash value and could even be tied to the stock market or another investment. However, there are limits on how much the policy holder can gain or lose.
- Variable Universal Life: Like universal life insurance, but with a wider range of investment options. Variable universal life insurance policies have no cap on how much a policy holder can gain or lose when investing the cash value of their policy.
What Impacts Premiums?
A lot of varied factors can impact your premiums. If someone applies for health insurance, then they’ll most likely have to have a physical examination as well as a detailed medical history in order to correctly determine their premiums. Factors that commonly impact premiums include:
- Age: The biggest factor impacting premiums. The older someone is, the higher their premiums.
- Gender: Women live longer, statistically, than men. So, their premiums are lower.
- Medical history: A family or personal history of heart disease, diabetes, etc. will raise premiums.
- Lifestyle: Dangerous activities, a history of smoking, etc. will impact premiums.
- Driving record: A history of dangerous or drunk driving can have a significant impact on premiums.
- Death Benefit: The larger the death benefit, the higher the premiums. The same is true for any cash value tied to the policy.
Carriers Apollo is Licensed with for Life Insurance
Apollo Insurance Group is licensed with TransAmerica, Protective, Lincoln Financial, Ameritas, Protective, Principal, North American, Assurity, Nationwide, Mutual of Omaha, Prudential, and more.
What states are Apollo licensed in for life insurance?
Apollo is licensed in all 50 states. This allows us to sell life insurance nationwide.
FAQ on Life Insurance
How much life insurance do I need?
This depends on a lot. But typically, you will want to take into account; cost of school for kids/child care, funeral expenses, your current income so that your spouse/beneficiary can continue living the same lifestyle without having to go to work. Some advisors use the rule of at least 5 times your annual income. Budget also comes into play with this.
Who needs life insurance?
Anyone with dependents (spouse/kids). i.e if you were to pass away, would someone you love fall into financial hardship because of this? Also, businesses with a “key person” – there are policies that would pay out to the business if someone that is vital to the operation of the business were to pass away.
How can I save money when buying life insurance?
Shop around with multiple insurance companies! Many companies have different pricing based on their different underwriting requirements. For example, some will give you a higher price if you smoke Marijuana, others will not. Term Life insurance is always the cheapest compared to permanent. If at all possible, quit using tobacco before applying for life insurance – there is a huge rate increase for tobacco users!
Is life insurance worth it? Or is it a waste of money?
Well, unfortunately EVERYONE will eventually pass away at some point in time. So, it is important if you want to leave something behind for your loved ones when that day comes.
Apollo Will Find the Right Plan for You
Apollo Insurance Group is a health insurance brokerage located in Lee’s Summit, Missouri and Chicago, Illinois. We have been around since 2010, and our mission is to positively impact people’s lives. We do this by fighting to find the best option for our clients, create relationships with our employees, and give back to our communities. Apollo also specializes in Medicare, life insurance, dental, and vision plans. We have agents that are experts on life insurance and are ready to help you find the right plan. Fill out our contact form to get in touch with an agent today.
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