Life insurance is an important piece of the overall insurance plan since it ensures that should something happen to you, your loved ones are not put in a position of not only grieving your loss, but also possibly having to completely adjust their lifestyle. Here at Yorkshire Insurance Advisors, LLC, we’ll be sure to help determine your protection needs, then provide options to best cover that need, incorporating as much flexibility as possible for potential future changes in needs. We will be sure to include any employer coverage in the analysis, with education on whether that is in your best interest to incorporate into the plan or not.
Life insurance can be complicated, but basically there’s two main types:
Term insurance, as per its title, is in place for a defined period of time, typically 10, 20 or 30 years. It’s often thought term insurance is a commodity and a 20-year term policy is the same no matter from where you purchase it, but that’s not typically the case. Each carrier offers different features, benefits and riders (extra benefits you can purchase for an added premium) that can make each policy more or less flexible. Some of the typical features and riders that can be added are:
- Convertibility to a permanent policy without underwriting. This feature used to be included with most policies, but now is often an add-on rider for an added charge. This is very important to look at including if there’s even a chance you might need to extend your coverage past the initial fixed term. It’s also wise to determine what kinds of permanent policies you can convert into, as the options vary from carrier to carrier and not all are ideal.
- Child Rider. This is an important rider to consider for anyone with children under the age of 18 at the time of purchase. Most child riders can be added on to a term policy only at the time of initial purchase for a nominal added premium. It typically covers all children in the family for the same fee. Child riders have two components to it that are important: 1) Death benefit should any child pass away (each child gets the same death benefit) and 2) Convertibility to a permanent policy without underwriting typically x5 of whatever benefit you requested initially. Most common benefit now is $20,000 since it covers a funeral and some inevitable lost work should the unthinkable happen. The convertibility option is what often is overlooked as a huge benefit since it offers the ability for the child to get their own policy (or you can take it out for them) at certain ages…typically 18, 22 or 25 (or all three) at standard non-smoker rates. Although this isn’t the best rating class by far, it’s guaranteed issue and if health (especially mental wellness) or lifestyle (drugs, smoking, etc) changes over time for whatever reason, it can be an affordable option to insure them for their families.
- Waiver of Premium. This rider is an added premium and is one that allows you to stop paying your premiums for a disability you’re not expected to recover from. Depending on the rider, if you became permanently disabled, the carrier may even continue your premium past the term of the policy and offer a death benefit for life. All are different and need to be reviewed prior to purchase, but for a more expensive policy that you may not have sufficient separate disability coverage to include it, this is a viable option to ensure you maintain important coverage for your family.
- Accidental Death & Dismemberment. This rider is one that for an extra premium can provide an added death benefit should your death be attributed to an accident, typically one not related to a health condition. It also can pay a benefit if you lose multiple limbs or both eyes. This can be a rider to look at if your career is on the riskier side or perhaps do a lot of driving where a serious car accident is more likely.
Permanent insurance comes in many forms, including whole life, universal life, indexed universal life and variable universal life for examples, but they are all similar in they have the ability to remain in force a lifetime. Whether or not they do is dependent on proper funding and potentially returns on investments within the policy in the case of variable universal life. Since it is meant to last a lifetime, you can expect the premiums to be higher than that of a term policy if funded properly. This policy types works well within a legacy plan, for final expense planning and/or for just lifetime death benefit should you need it even into retirement (very common today).
You can rest assured we’ll be sure to provide education around the best options available to meet your goals, and really help you understand what the coverage will do for you, and what it doesn’t.
We invite you to schedule an initial consultation at 262-366-2702 or e-mail us at .