Life Insurance Resource Center

Life insurance provides financial protection for your loved ones in the event of your death. It pays out a death benefit to your beneficiaries, which can help cover expenses like funeral costs, outstanding debts, and living expenses. There are two main types: term life (coverage for a specific period) and permanent life (coverage for your entire life with a cash value component).

Choosing the right life insurance product depends on your needs, budget, and financial goals. Consider: * Your current financial situation and future obligations * How long you need coverage (temporary or permanent) * Whether you want just death benefit or also cash value accumulation * The financial strength and reputation of the insurance company A licensed agent can help evaluate your specific situation.

Life insurance is essential if anyone depends on your income or if you have debts that would burden others after your death. Common reasons include: * Replacing income for your family * Paying off a mortgage or other debts * Funding children's education * Covering final expenses and estate costs * Providing for special needs dependents * Equalizing inheritances * Business continuation

The life insurance buying process typically involves these steps: * Determine how much coverage you need * Compare policy types (term vs. permanent) * Get quotes from multiple insurers * Complete an application with personal and health information * Undergo a medical exam (for most traditional policies) * Wait for underwriting approval * Review and sign the policy documents * Pay your first premium to activate coverage

A common rule of thumb is 10-15 times your annual income, but your actual needs depend on: * Your income and your family's living expenses * Outstanding debts (mortgage, loans, credit cards) * Future education costs for children * Final expenses and estate taxes * Your spouse's income and retirement savings * Any special needs of dependents * Many insurers offer online calculators to help estimate your needs.

Your beneficiary is the person or entity who receives the death benefit. Considerations when choosing: * Primary beneficiaries (first in line) and contingent beneficiaries (if primary predeceases you) * Specific percentages if naming multiple beneficiaries * Special needs trusts if beneficiary has disabilities * Minors may need a guardian or trust * Updating beneficiaries after major life events (marriage, divorce, births)

* **Application:** Your request for coverage with personal/health information * **Policy:** The legal contract outlining coverage terms * **Beneficiary:** Designation: Names who receives the death benefit * **Claim Forms:** Used by beneficiaries to request payment * **Change Forms:** For updating beneficiaries, address, etc. * **Loan/Withdrawal Forms:** For accessing cash value in permanent policies