09/20/2016 Life Insurance: Is it for you?

Alli Walsh, Social Media Strategist

Life Insurance: Is it for you?

It’s too expensive. I really don’t need it. It’s difficult to obtain. I can’t figure out what’s best for me. I don’t want to think about this subject at all.

These are some of the most common concerns about life insurance. While Combined Insurance sells life insurance, we understand that it may not be right for everyone. While it’s always advisable to discuss your unique needs with a qualified life insurance agent, here’s the bottom line on who should consider coverage and what the various options entail.

Do you need it?

If you have dependents, life insurance likely makes sense for you. Securing a policy gives peace of mind that should you need it, the coverage will be there to assist your family members maintain their quality of life after you’re gone. While policies are available for young and older consumers, it may make sense to consider a policy when you are still young, as  starting young means you may pay a lower rate, but you’ll also pay more premiums over time.

For those without dependents, or whose children are  able to care for themselves, life insurance may not be needed.  Or, if you and your spouse have earned and saved enough to provide for yourselves in the event one of you passes away, you may not need to purchase life insurance. Just like you don’t need car insurance when you stop driving, eventually, some people outlive their need for life insurance, too.  Each situation is different, and it is important that you consider your individual situation and the needs of your family once you are gone.

There are two main types of life insurance, term and whole life or permanent.

Term life insurance

This is the simplest and most common, paying a benefit should the death of the policyholder occur during the term of the policy. Terms can range from one to 30 years and rarely include other benefit provisions.

  • Level term policies have the same death benefit at any point during the term, while decreasing term policies provide a death benefit that decreases in increments, usually annually, over the life of the term. 

Whole life or permanent insurance

This insurance lasts your entire life, no matter how long you live. The cost per $1000 of benefit amount increases as the policyholder ages. In order to offset later in life costs, younger policyholders typically “overpay” premium amounts early in their policies. Overpaid funds must be refundable should the policy be cancelled before it’s used. 

  • Whole or ordinary life insurance involves a death benefit with a savings account filled with dividends the company pays to you.
  • Universal or adjustable life insurance offers possible flexibility in terms of the amount of the death benefit and the option to alter monthly payments based on how much money has accrued in your related savings account. This flexibility can be helpful if your financial situation changes, but caution must be exercised. If the savings account overages are used, the associated policy could lapse.
  • Variable life insurance combines a death benefit with a savings account that can be invested in stocks, bonds and mutual funds. Interest-earning potential may increase the value of your policy more quickly, but is tied to the health of investments. The associated death benefit may decrease if investment performance is poor.
  • Variable-universal life insurance offers the investment risks and rewards of variable life combined with the ability to change premium amounts of universal life. 

Learn more about Combined Insurance and our products, including whole life insurance.


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