Life Insurance Explained

By: David Murdock, Life Insurance, Healthcare and Group Benefits Risk Consultant at The Prewitt Group

Clients are often surprised by how simple and quick the process of purchasing life insurance really is. Responses like, “Wow! That was really easy,” or “That didn’t take long!” made me realize that people are often hesitant to purchase life insurance because they assume the process is time consuming and complicated. In reality, the process is straightforward.

The Process

First, complete an application, which takes 15-20 minutes, and then set up a paramedical exam. A paramedical exam is administrated by a paramedical group. They come and visit with you at your home or office to ask you medical questions and take your vitals. The results of the paramedical exam are what underwriters use to determine what type of risk the applicant poses and how they are going to offer a policy to the applicant.

Many people worry that a medical issue, even if it occurred years ago, will prevent them from getting life insurance. That’s almost never the case. It’s important to set those feelings aside and just step into the process.  The value of protecting your loved ones outweighs any hesitations about the process or the outcome.

The Value

Life insurance offers protection for your family and home in the event of your death. In fact, life insurance should be called “income replacement insurance.” Whether you are the single earner in your family or if you and your spouse are earning together, life insurance replaces the cumulative effect of your earnings. The importance of life insurance increases when you get married and/or start a family. It’s smart to acquire life insurance at a younger age, because you’re not only healthy, but you also pay the same rate over a period of time. As you delay the acquisition of coverage, you’re just gambling with the outcome.

The Policies

The most common type of life insurance is term life insurance, which lasts for a “term” of 10, 20 or 30 years.  The purpose of term life insurance is to provide enough face-value, depending on what your situation calls for, to replace your income for a period of time. While there are more complicated types of life insurance, they are more expensive and usually for individuals with extraordinary income who are looking for things to do with their income outside of the common expenses of life.

Getting a Quote

People frequently ask me for a life insurance quote to know how much life insurance is going to cost.  Just like every other agent in the U.S., I use an online quote tool.  I can plug in your age, gender, state of residence, the amount of life insurance you want, etc.  But, choosing a health class is a little trickier. While I can get some of that information from you, a quote is a very generalized idea of what that policy is going to ultimately cost. Instead of “getting a quote,” go through the process. Apply for coverage and when the policy is issued, you can adjust the face value to meet your budget once you’re approved. It’s that simple!

If you’re interested in learning more about life insurance, contact me today!

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