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You've got real questions about life insurance, and we've got real answers.
This section is dedicated to shedding light on questions you should ask to get the right coverage. But keep in mind that some questions are unique to you and can only be answered by your agent or one of our professionals.
Here you'll find answers to many of the most commonly asked questions about insurance. But because insurance laws vary from state to state and coverage may not be available in some areas, the information provided may not apply in all situations.
If you don't find what you're looking for, we're here to answer all your insurance questions.
What percentage of my money should be in savings, investments, and insurance? Why?
Generally speaking, three to six months' salary should be in immediately available savings, ten to fifteen percent of salary should be dedicated to long-term savings and investments, and approximately two to five percent of salary should be used to fund your life insurance program. These guidelines can help protect you from unexpected losses, help to provide a stable foundation for retirement, and protect your family if you die prematurely.
How much life insurance do I really need?
Generally speaking, seven to ten times your annual salary
is recommended. This factor takes into account mortgage
loans, expenses at death, short-term debt (car loans,
credit cards, etc.), ongoing cash flow for dependents,
and possible retirement funding for a surviving spouse.
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What guideline should I use in selecting between term insurance and whole (permanent) life insurance?
When your needs are high and your budget for filling these needs is low, term insurance is an excellent source. However, term insurance premiums will continue to rise over time with no build up of cash value or equity. Whole life insurance is a good choice when your budget allows this type of protection for the following reasons:
- Guaranteed insurability options for future life insurance purchases
- Build up of cash value and equity
- Collateral for borrowing money against cash values
- Options to allow dividends to pay premiums in later years
Many times, people select a combination of both term and whole life depending on how much they can afford.
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Why would I want to invest in whole life insurance when I can get a much better return in the stock market?
You wouldn't! Life insurance isn't an investment tool. Its primary mission is to provide guaranteed cash flow protection for your family. Conversely, you wouldn't use the stock market as a guaranteed method to provide cash flow protection.
Do both spouses need life insurance?
Generally speaking, yes, because whether you have single or dual incomes, the death of one spouse will usually impact necessary cash flow.
Should I have personal life insurance when I'm already covered by my group plan?
Generally, yes. In the future you may lose your job, change jobs or become disabled. Additionally, you risk the possibility of becoming uninsurable at a later date.
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Why would I need to purchase mortgage insurance through a life insurance company when I already have mortgage insurance (PMI) through my bank?
You might not have what you think you have. Bank mortgage insurance (PMI) protects the lender from default on the loan. In the event of death, life insurance allows the surviving family members the option to pay off the loan or keep the money.
Why should I have life insurance on my children?
You can provide your children with some guarantees that allow them to purchase future life insurance as their needs change without evidence of insurability. It's a good idea to purchase life insurance on children when their insurability is at their highest level. Life insurance premiums are lowest for children.
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