What You Really Need to Know About Life Insurance

Many people put off having a conversation about life insurance for a variety of reasons.  Maybe it’s because you think you’re young and healthy or maybe it’s because you don’t think you can afford it.  No matter the excuse, the fact remains that right now is the best time to educate yourself on the topic of life insurance.  While there is a vast amount of information on this topic, what you really need to know can be boiled down into these six main points.


You likely need a higher death benefit than you think. 

A million dollar life insurance policy may seem like a lot, but you need to consider everything this will go toward paying.  Funeral costs and any debt you leave behind can take up a good portion of this money.  If you’re the breadwinner in your household, your dependents will need this money to pay for their needs until they can earn income for themselves.  Working with a qualified life insurance agent can help you determine the right death benefit for you.

Understand the difference between Term Life & Permanent Life. 

You may have heard the words “term life” and “permanent life” before, but do you really know what theses mean? Term life insurance will cover you for a set time period (most commonly 10 to 30 years), after which you will no longer have insurance.  This is a good choice for young families who can’t afford permanent insurance, or for those who only want to be insured for a certain time period.

In contrast, permanent life insurance covers you as long as you pay the premiums.  In addition to the death benefit, it also has an investment component that builds cash value over time.  You can choose from whole, universal, and variable permanent life insurance that offer different investment options and the ability to use your cash value to pay premiums.


Pay your premiums on-time. 

This is an important one.  If you forget to pay your premium, your life insurance policy may be canceled.  Should something happen during this lapse in coverage, your beneficiaries will not receive any of the death benefit.  This is a risky game to pay and one that can be easily prevented simply by paying your premium on time!  Set a calendar reminder or set up auto-pay.

Fill out your application honestly. 

It seems obvious to remind you not to lie on your life insurance application, but it happens more than you might think.  Should you be anything less than honest, you could be disqualified from your policy and leave your beneficiaries with nothing.  Take the application, and your answers, seriously.


Make beneficiaries aware of where they can find your policy. 

Another important reminder is to make sure your family or someone you trust knows where to find your policy information.  If you are the only one who has this information, it won’t do your beneficiaries much good should something happen to you.  Have a plan and keep your life insurance policy information in a safe, accessible place.

Don’t wait to get coverage.

Finally and most importantly, don’t put off getting coverage.  When you’re young and healthy, you may not feel the urgency to plan for your death; however this is the best time to invest in life insurance.  The premiums are cheaper when you’re younger, so buying into a plan now will save you — in many ways — in the long run.

Do you have another question about life insurance that wasn’t covered in this article?  Leave a comment or contact me & I’ll provide you with an answer!