Life Insurance

Life Insurance

What Is Life Insurance?

It’s difficult to imagine, but there may be an unfortunate time when you won’t be there to support your family. What will they do without you? Life insurance provides the necessary protection for your family’s financial future. Life insurance benefits are generally not taxable at the federal level, and your loved ones can use the benefits in a variety of ways, including covering burial costs and estate taxes, using the funds for a readjustment period, and paying monthly expenses such as daycare costs, college tuition or retirement. If you’re a business owner, life insurance makes it possible for your heirs to pay estate taxes and sustain the business during subsequent shifts in management. Whether you’re an individual or family, business owner or single parent, there’s no wrong time to get life insurance.

At B.W. Baker Insurance, our experienced life insurance specialists will provide a complimentary personal assessment your life insurance coverage needs. We promise to find the best life insurance policy for you and your budget. Contact a B.W. Baker life insurance representative today for more information or to get a quote.

How Much Life Insurance Do I Need?

Determining the necessary amount of life insurance can be tricky. It depends on a number of variables including your marital status, number of dependents, current and projected income, value of your assets, and your preferred lifestyle. Generally speaking, your life insurance benefit should equal 5-10 your current income, however this can significantly differ depending on your circumstances. In addition, there are different types of policies within the broader categories of temporary life insurance and permanent life insurance. We cannot stress how important it is to talk to an experienced life insurance agent such as Bart Baker. Contact B.W. Baker Insurance today to make an appointment.

What Types Of Life Insurance Are Available?

There are two main types of life insurance: temporary and permanent. Our life insurance offerings include a variety of options for each type of coverage.

Temporary life insurance, often called term life insurance, refers to a policy that is active for a set period of time. Generally speaking, term life insurance provides the most coverage for your insurance dollar. It may be the best choice if your needs are temporary or your funds are limited. The downside of term life insurance is that it is only active for the specified length of coverage and does not accumulate cash value. In other words, nothing is owed to the beneficiary after the term expires. Moreover, a term insurance premium usually increases with age at each renewal. The three main factors concerning term insurance are the face amount, premium, and coverage term. Many life insurance companies offer different combinations of these including level term, annual renewable term, and mortgage life insurance policies.

Permanent life insurance is life insurance that remains active until the policy matures as long as the premium is paid. The insurer cannot cancel the policy for any reason other than a fraudulent application. There are two main types of permanent life insurance: whole life and universal life.

Whole life insurance provides lifetime death benefit coverage for a set premium. Although whole life insurance policies can be more expensive at first, the premium will not increase with age like with term insurance policies. These level premiums are guaranteed for the life of the policy. Additionally, since permanent life insurance policies accumulate cash value, the cash reserve can be accessed at low interest rates through income tax free policy loans. If there are unpaid policy loans upon death of the insured, the loan amount is simply subtracted from the death benefit. Although coverages and premiums will not change overtime with whole life insurance, policyholders can request additional temporary or permanent coverage in exchange for a premium increase. The advantages of whole life insurance include guaranteed death benefits, accumulated cash values, and fixed annual premiums.

Universal life insurance combines the advantages of guaranteed protection and cash value accumulation with the flexibility to adjust the policy overtime. This means that your life insurance policy can adapt to your changing needs and budget, ensuring that you have the best protection no matter what.

There are many coverage options to choose from, and you need to contact an experienced life insurance agent before making any decisions regarding life insurance for you and your family. The B.W. Baker family has been in the industry for over 25 years, and our life insurance specialists are the best in Southern California. We can help you find the most appropriate life insurance package for your needs and budget. Contact a B.W. Baker representative today to make an appointment.

Definitions

  • Beneficiary The beneficiary is the party that receives policy proceeds upon the insured person’s death.
  • Level Term A level term life insurance policy is one that guarantees a fixed premium for longer than one year. Common terms include 5, 10, 15, 20, 25, and 30 years.
  • Annual Renewable Term A one-year policy that is guaranteed to renew with an equal or lesser amount regardless of the insurability of the applicant.
  • Mortgage Life Insurance A level-premium policy with a face value that declines with the mortgage. This type of policy ensures that any outstanding mortgage will be paid upon death of the insured.
  • Riders Special amendments or additions to life insurance coverage. Example riders include accidental death benefit, waiver of premium, terminal illness, accelerated benefit, guaranteed insurability, family income benefit, and children’s term insurance.

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