What You Need to Know About Life Insurance

First off, thank you for taking the time to fill out our form inquiring about life insurance. This article should answer many of the questions you have as you look into getting a life insurance policy, but if you have more in depth questions, or you're ready to get a policy quote, either book an appointment with us, or fill out this form and we will get started on a quote for you.

Before we jump in, a quick note about FFL Rose Rock: we are an insurance brokerage that works with many insurance providers known as carriers. This enables us to shop for you and provide several quotes to choose from, and we can do all of this without ever needing to talk on the phone with you if you don't want to, but I'm getting ahead of myself.

Here's everything you need to know to get started...everything from whether you need life insurance, what type of policy to choose, and how much coverage to get, and what the process looks like.

What Happens When You Die Without a Life Insurance Policy?

Take a moment to think about what would happen financially is you were to die tomorrow. Do you already have your funeral and burial or cremation taken care of? If not, do you already have the money saved up so that the recipient of your estate? Do you have outstanding debts like a mortgage on your home where someone will continue living after you pass? Do they have enough income to continue paying or do you need to set aside enough to either a) pay the debt off or b) cover the payments until they find a new place to live. These are a couple of things to consider if you were to die without a life insurance policy, which may create a number of challenges and risks for your family. Depending on your situation, they may have to:

• Pay for your funeral and burial expenses, which can cost thousands of dollars.

• Settle your debts, such as mortgage, car loans, credit cards, and medical bills, which may reduce or deplete your estate.

• Pay taxes on your estate, which can be as high as 40% in some cases.

• Support themselves without your income, which may affect their lifestyle and future plans.

• Deal with legal issues, such as probate, inheritance disputes, and guardianship of minor children.

These scenarios can cause a lot of stress and hardship for your family, especially during a time of grief and loss. That’s why having a life insurance policy because it can remove the stress your family would face in the event of your untimely passing.

What is Life Insurance?

Life insurance is a way of protecting your family from the financial consequences of your death. It is a contract between you and an insurance provider and it works like this:

• You pay a regular premium to an insurance company, either monthly, quarterly, or annually.

• In exchange, the insurance company promises to pay a lump sum of money, called the death benefit, to your beneficiaries when you die.

• Your beneficiaries can use the death benefit for any purpose, such as paying off debts, covering living expenses, funding education, or saving for retirement.

• The amount of the death benefit and the premium you pay depend on various factors, such as your age, health, lifestyle, and the type of policy you choose.

What Types of Life Insurance Are There?

There are two main types of life insurance: term and permanent.

• Term life insurance provides coverage for a specific period of time, usually 10, 20, or 30 years. It is the simplest and most affordable type of life insurance, as it only pays the death benefit if you die within the term. If you outlive the term, as over 90% of policy holders do, the policy expires and you get nothing back. Term life insurance is ideal for people who need temporary protection, such as young families, homeowners, and people with a lot of debt.

• Permanent life insurance provides coverage for your entire life, as long as you pay the premiums. It also has a cash value component, which is a savings account that grows over time and can be accessed while you are alive. You can use the cash value for various purposes, such as paying for long term care, paying premiums, borrowing money, or supplementing your retirement income. Permanent life insurance is more complex and expensive than term life insurance, but it offers more benefits and flexibility. Permanent life insurance is suitable for people who want long-term protection, estate planning, and wealth accumulation.

There are different types of permanent life insurance, such as whole life, universal life, and variable life, each with its own features and advantages. You should consult an insurance agent to find out which one is best for you.

Benefits of Life Insurance

Life insurance can offer many benefits for you and your family, such as:

• Financial security: Life insurance can ensure that your family can maintain their standard of living and achieve their goals even after you are gone. It can also help them avoid financial difficulties and debt problems that may arise from your death.

• Peace of mind: Life insurance can give you and your family a sense of comfort and confidence, knowing that you have taken care of their future and that they will not be burdened by your final expenses.

• Tax benefits: Life insurance can offer tax benefits, such as tax-free death benefit, tax-deferred cash value growth, and tax-advantaged withdrawals and loans. However, there may be some limitations and conditions, so you should consult a tax professional before making any decisions.

• Flexibility: Life insurance can be customized to fit your needs and preferences. You can choose the amount of coverage, the type of policy, the duration of the policy, the frequency of the premium, and the beneficiary of the policy. You can also change or adjust your policy as your circumstances change over time.

How to Choose a Beneficiary

A beneficiary is the person or entity that will receive the death benefit from your life insurance policy when you die. You can name anyone as your beneficiary, such as your spouse, children, parents, siblings, friends, or charity. You can also name more than one beneficiary and specify the percentage of the death benefit that each one will get. You should choose your beneficiary carefully, as it can have legal and tax implications. Here are some tips to help you choose a beneficiary:

• Consider your goals and priorities: Think about why you are buying life insurance and who you want to protect and support. For example, if you want to provide for your spouse and children, you may name them as your primary beneficiaries. If you want to leave a legacy to a cause or organization, you may name them as your secondary or contingent beneficiaries.

• Review your policy regularly: You should review your policy and your beneficiary designation at least once a year, or whenever you experience a major life event, such as marriage, divorce, birth, death, or inheritance. You may need to update your policy and your beneficiary to reflect your current situation and wishes.

• Communicate with your beneficiary: You should inform your beneficiary that you have named them as such and provide them with the details of your policy, such as the company name, the policy number, and the contact information. You should also keep a copy of your policy and your beneficiary designation in a safe and accessible place, such as a fireproof safe, a bank deposit box, or a trusted lawyer.

What’s the Process for Getting a Life Insurance Policy?

Working with FFL Rose Rock there are a few ways of getting a life insurance policy. The most common way starts with booking an appointment with a field underwriter. You can schedule an appointment here.

Getting to know you

Our underwriters kick off the appointment by first helping you determine what kind of policy and the amount of coverage you are looking need. They will ask questions regarding your financial situation and make recommendations based on what you present your goals to us as.

Next, your underwriter will ask you a series of medical questions. Be prepared to provide your prescriptions, dates of treatments, and other information about your medical history. This is what the insurance companies uses to price a policy. Don't assume that some condition you have will disqualify you from a policy. One of the benefits of working with us as brokers is that there is almost always a policy that will cover you, regardless of conditions.

Getting a quote

At this point, your underwriter will be able to provide you a number of quotes generally and will usually recommend the cheapest policy but will review the differences with you if recommending another policy. The quotes can be adjusted in real time based on the coverage amount you want.

Up until this point, your appointment will take 10 to 15 minutes. From here, your underwriter will ask if you would like to apply for a policy at which point, you can walk away or you can apply right there on the phone with the underwriter. That may take an additional 15-30 minutes, depending on the policy being applied for.

Applying for a policy

Every carrier has a different policy application, so some ask for information that others won't. The carriers we work with do not require a medical exam. But generally, in addition to the questions your underwriter asked in the getting to know you stage, you will likely need to provide your either social security number or the last four, your driver's license number, and a form of payment.

The SSN is used to pull your medical records to verify the information you've provided, the driver's license or photo ID to verify your identity, and a form of payment in order to put the policy in force upon application approval.

2nd Way to Get a Policy...

Prior to the application portion, if you're someone who doesn't like to speak on the phone, or you just don't have time, we've developed a solution that will allow us to deliver you quotes by completing a form which we will use to create your quotes to send to you. Once you select the policy and coverage, you would schedule an appointment for your underwriter to complete the application. Sometimes we can start the application on your behalf, but many applications require us to provide disclosures making it so these usually need to be completed on the phone.

3rd Way to Get a Policy...And you don't need to be on the phone for it...

We've partnered with Ethos that lets you do all of the above on your own and you are able to get a policy up to $2 Million in about 10 minutes. Just use this link here.

After Your Policy is in Place

• Pay the premium: After your application is approved, you need to pay the first premium to activate your policy. You can choose to pay the premium monthly, quarterly, or annually, depending on your preference and budget. You should pay your premium on time and in full, otherwise your policy may lapse, and you may lose your coverage.

• Review and update your policy: You should review your policy and your coverage periodically, at least once a year, or whenever you experience a significant change in your life, such as marriage, divorce, birth, death, or inheritance. You may need to update your policy and your coverage to reflect your current needs and goals. You can also make changes to your policy, such as increasing or decreasing the amount of coverage, adding or removing riders, or switching from term to permanent or vice versa. However, some changes may require additional underwriting, fees, or taxes, so you should consult your insurance agent or company before making any changes.

Determining What Type of Policy You Need and How Much Coverage?

One of the most important decisions you need to make when buying life insurance is what type of policy you need and how much coverage you need. There is no one-size-fits-all answer to these questions, as they depend on various factors, such as your age, health, income, expenses, debts, assets, family, and goals. However, here are some general guidelines to help you determine what type of policy you need and how much coverage you need:

• What type of policy you need: The type of policy you need depends on your purpose and duration of buying life insurance. If you need temporary protection, such as to cover a mortgage, a loan, or a child’s education, term life insurance is the way to go. If you need permanent protection, such as to leave a legacy, to save for retirement, or to plan your estate, you may choose permanent life insurance, which is more expensive and complex, but offers more benefits and flexibility.

• How much coverage you need: The amount of coverage you need depends on your financial situation and your family’s needs. A common rule of thumb is to multiply your annual income by 5, and add any major debts or expenses, such as mortgage, car loans, credit cards, medical bills, funeral costs, and college tuition. However, this may not be enough or accurate for everyone, as it does not account for inflation, taxes, interest rates, and other factors.

Where to Go From Here

Now that you have a basic understanding of what life insurance is, what the types are and what they are ideal for, you should have a good enough understanding to continue your journey towards protecting your family. Schedule and appointment today or complete a form and an underwriter will start working on your quotes.