5 Things Agents Wish You Knew About Life Insurance

Ever wonder who you can go to for life insurance advice? Getting any type of insurance can be a bit overwhelming with so many different options, but we hope that this helps give you a little more insight on what to know about buying life insurance. We reached out to different insurance agents and asked them a few questions regarding life insurance.

A few terms we want to define before we dive right in:

• Insurance Premium: the price you pay for a policy
• Policy: a contract of insurance
• Term Life Insurance: provides protection for a specific period
• Whole Life Insurance: a type of permanent life insurance that comes with three important guarantees: 1) a premium that will never increase, 2) a death benefit that will never decrease1, and 3) a buildup of cash value that can be accessed through policy loans.
• Universal Life Insurance: a type of permanent life insurance that offers flexibility to meet your changing needs. The policy death benefit can be increased or decreased (within certain limits). The premium you pay can be adjusted within a range according to your goals and ability to pay. The cash value in a universal life policy can grow in various accounts that you feel comfortable with. That cash value can be accessed through withdrawals or loans for emergencies or futures needs. 

Life Insurance Tips from Agents

1. What is your top recommendation for a client that doesn’t have life insurance? “The first question that must be answered is “Why?”. This question always gets the conversation started regarding the two reasons why people need life insurance which is debt and protecting the people they care about.” (John Popp, 35 years)
2. What is one mistake clients make when getting life insurance? “Not getting enough coverage and thinking they can’t afford it. Life insurance can be affordable.” (Andrea Robinson, 10 years)
3. For someone looking to get life insurance, where should they start and how do they know which product is best? “Finding an agent is the first step. If they don’t have one, they can try searching for someone in their area or by asking their family or friends who they recommend. Once they find an agent they feel comfortable with, they should work with them to do an analysis to better understand what their needs are. The analysis can consist of looking at current debt, their income, their lifestyle, what they own, etc. Every product is great, but it depends on the individual and their circumstance.” (Jennifer Zinda-Mancl, 11 years)
4. How much life insurance does someone need? “There is no magic number for this. Each person’s situation is different, and their needs will be different. I always recommend that each client purchase enough coverage to cover any debt they may have and replace their income at a minimum.” (Andrea Robinson, 10 years) 
5. Is life insurance expensive? “It can be very affordable, and it is always cheaper to purchase when you are younger. Finding an agent and connecting with them can help understand what options a person may have.” (Jennifer Zinda-Mancl, 11 years)
6. My employer provides life insurance, do I need another policy? “Absolutely! Having your employer provide life insurance is a plus, but it’s important to have a policy outside of this in case you switch jobs or lose your job.” (Phil Hinrichs, 18 years)
7. Why do I need life insurance? “Life insurance can help cover any income your family may have to go without if you pass. There are costs associated with funerals whether you are young or old and life insurance can help with this. Another reason, if you have debt, it does not go away after you pass – even if you are young, single and healthy. Speaking with an agent can give a better insight since every person’s situation is unique.” (Sharon Luna, 4 years)

Insurance is Not One-Size-Fits-All

Before you take out a life insurance policy, review the different types available to find the best option for you. Two of the most common life insurance policies are permanent and term life. A permanent life insurance policy will have a cash value accumulation and a death benefit, where term life insurance provides a death benefit if the insured dies within a specific time. Within those types of insurance, there are various types that can work to better protect you and your loved ones. 

When Your Life Changes, Your Coverage Should Change Too

Depending on what stage of life you’re in, your life insurance needs could be different. Certain factors like a change in age, marital status and family size can impact your coverage needs. When getting married, having a discussion about combining your finances will likely also include your life insurance policy. If you’re starting a family, you’ll want to update your life insurance policy to cover your entire family, your home and anything else that may depend on your income. Consider meeting with your local insurance agent to find the best coverage option for you. 

A Gap in Coverage Could Be Costly

Life can come at you fast. Not having the right type of coverage and being underinsured can cost you or your loved ones a lot more than you would like it to. There are always risks of being underinsured that you should consider when you’re getting life insurance. If you were to pass away and not cover your bases, it may result in some type of debt for your family that you most likely don’t want them to inherit. 

Life Insurance Can Help You While You’re Living

Did you know that life insurance can be used while you’re living? Although its purpose is to help your family if you were to pass away, it can also help while you’re living. With certain life insurance policies, money can be used to pay for terminal illnesses with a specific rider added to your policy. You can also withdraw from your life insurance policy, but know that it may reduce the value of your death benefit in the future. Depending on the life insurance policy you have, you may be able to take out a loan on the policy’s cash value. With any of these options, you should consult with your agent to learn more about your specific policy. There are various myths about life insurance that you may have heard but there may be ones that are not necessarily true. Take the time to speak with an agent to better understand what coverage best suits your needs. 

Your Agent is There to Help

Finding the right coverage and understanding the different types of life insurance available may be a bit overwhelming. Especially for anyone who is young and doesn’t really know how much insurance they need. Agents are a great resource to reach out to discuss your needs and how to get started. 

If you have questions about life insurance, search for your local Farm Bureau agent to get started. Speaking with an agent can help give you peace of mind when thinking about the future.