Life Insurance 101

If you’re curious about some of the basics about life insurance, we’ve included general information here.

Want to learn more about how life insurance can benefit you and your family?

Types of Life Insurance

Not sure what the different kinds of insurance are or what the terms mean? Below are some basics to help explain what kind of coverage various options can provide.

Whole Life Insurance

Whole life insurance is permanent life insurance that provides protection for your entire life and offers financial support of a loss at any time.

Term Life Insurance

Term life insurance offers financial support of a loss only during a specified period. The premiums may be lower than whole life insurance premiums, but it won’t offer coverage for your entire life.

Accident Insurance

Accident insurance offers protection that pays you cash when you suffer an unexpected, qualifying injury.

Critical Illness Insurance

Critical illness insurance protects you and your family should a major medical diagnosis occur. It pays you lump sum benefits upon initial diagnosis of a range of medical diagnoses from heart attacks to cancer, to childhood diseases, to many other health conditions.

Disability Insurance

Disability insurance is income protection designed to help cover any income that is lost because of a disabling injury or illness.

Did You Know?

  • Just 52% of consumers own life insurance (e.g., individual, employer-sponsored, etc.), which is down from 63% in 2011

– 2021 Insurance Barometer Study, LIMRA and Life Happens

  • 42% of Americans say their household would face financial hardship within 6 months should a wage earner die unexpectedly — 25% would struggle financially within 1 month

– 2021 Insurance Barometer Study, LIMRA and Life Happens

  • 23% of millennials expressed financial concerns of paying for medical expenses in case of illness or injury due to COVID-19

– 2021 Insurance Barometer Study, LIMRA and Life Happens

  • The top reason people give for not purchasing coverage is that it is too expensive, yet, more than half of Americans overestimate the cost of life insurance three-fold

– Facts About Life 2021, LIMRA

  • 69% of consumers with life insurance say they are less stressed knowing their loved ones are financially protected with life insurance

– 2019 Insure Your Love Consumer Survey, Life Happens

  • There are over 48.3 million visits or 1 out of every 7 people that seek medical attention for an accidental injury, each year

– Injury Facts, 2019 Edition

Common Misconceptions

Myth:

Life insurance is only available directly through financial advisors. This is not the case. In fact, quality, strong valued policies for your entire family are often available through your workplace or your spouse’s workplace. For example, Boston Mutual Life Insurance Company offers a wide range of workplace solutions paid for by employers, employees or both, including whole life, term life, critical illness, accident and disability insurance. Licensed sales associates of Boston Mutual Life Insurance Company are always available throughout this process.

Myth:

Workplace policies can’t offer enough options for your needs. False – you’ll find that well­ established life insurance companies understand the market well enough to offer a range of flexible products, including policies that are payroll deductible, stable in cost regardless of your age, portable when you’re changing jobs and available with add­on riders or other insurance types through the same carrier.

Myth:

Young, healthy people don’t need life insurance. The truth is, your health can change at any time and it’s best to expect the unexpected. Further, uninsured people can easily leave behind personal, medical or mortgage debts and/or funeral expenses that end up burdening family members or executors when they die.

Myth:

Your life insurance policy only covers you, not your family. Not true. Some products protect you, your spouse, your dependent children and even your grandchildren, often at one affordable cost. That’s why marriage and becoming a parent can be excellent reasons for buying new policies.

 

Glossary

Beneficiary – The person or persons named in the policy to receive the insurance proceeds at the death of the insured.

Cash value – The sum of money that can build inside many permanent life insurance policies and can be accessible. The actual cash value may be decreased by a surrender charge, loans or withdrawals.

Guaranteed Issue – A policy that is easier to get because it does not require answering medical questions or taking a medical exam.

Portable – Insurance portability lets you take your life insurance coverage with you when you leave a job, your employer stops offering life insurance as a benefit, or you retire.

Premium – The payment, or one of the periodic payments, a policy owner agrees to make for an insurance policy. Depending on the terms of the policy, the premium may be paid in one payment or a series of regular payments, e.g., annually, semi-annually, quarterly or monthly. The premium charged reflects the expectation of loss, expenses and profit contingencies.

Rider – An endorsement, also known as an amendment to an insurance policy, modifies clauses and provisions of the policy, including or excluding coverage.

For questions, or to explore your options with Boston Mutual Life Insurance, contact a representative in your area!