Frequently Asked Questions
- Why should I have life insurance?
- I don't believe in insurance. Why should someone profit when I die?
- I'm twenty-something, an only-child, single and my parents are gone. I care for no one. What's in it for me?
- What other types of insurance do you sell?
- What types of life insurance are available?
- How much coverage should I have?
- How do I buy life insurance and choose the right company?
- How do I know if I'm getting the best rates?
- What are the steps that I would go through?
- Should I get insurance to pay off my mortgage if I die?
Why should I have life insurance?
Few deny that we live in a very connected world; we benefit from and provide support to our families, our friends and our communities. You love them dearly. However, few of us know the date and time of our death. Insurance protects you and your family from this uncertainty and the ensuing turmoil your loss may create. Insurance makes sure you're not a burden to them when you're gone.
By the time you die, you have worked very hard to benefit yourself and shared the fruits of these efforts with those you love. You support them. They have given you much joy. Your relationships need not end when you die. Insurance makes sure your efforts in life are not for naught; it is a way to leave a legacy of support for those you love. Insurance is a way to transfer your wealth to the next generation which allows them to engage life with fewer concerns and can therefore chart a better course. If you don't direct your wealth others will direct it in your place. The results may not be what you desire.
By the time you die, you have received many benefits from your community. You may have played in the park, attended college, helped the homeless or protested for a greener future. These benefits, institutions and causes will also miss your contribution. Insurance is a way to continue your legacy so your vision and passions lives on in a way better equipped to meet that benefit, institution or cause.
By the time you die, your wealth is not only measured by what you have accumulated but also by the people you have touched and by the time you have spent with them. Insurance is an attempt to translate these intangibles of life into a tangible impact and it allows you to focus this impact where you desire.
At some point in life you may decide to stop or must accept that you will no longer create income. How will you support yourself in retirement? Insurance is a way to accumulate wealth tax-free while you are able to generate income. When you retire you may use your wealth tax-free to do what ever you like. Or you may use insurance to provide an income in retirement that is guaranteed for life. Insurance answers the question, "What happens when I grow old?" Insurance allows you to take care of you.
At 877 Insurance Agency, our first job is to listen to you in order to help determine the best insurance policy for your unique situation. Getting your life insurance in order gives you the peace of mind and freedom to do other things with your money and time because you have an asset you can count on, insurance, and you know you have taken care of your responsibilities to family, friends, community and you.
Insurance is not a way for you or your beneficiary to profit. People who choose to use insurance choose to join forces to reduce uncertainty; if we knew the future there would be no need for insurance. In the case of life insurance, a life insurance company makes an agreement with you to provide a specific amount of money at any time in the future, when you die. With this agreement, while it is certain you will die, it is now certain that you will leave behind a certain amount of money. This money goes to your beneficiary. Essentially, the life insurance company pools everyone's regular contributions, the premiums. These premiums are saved and invested it in a manner that meets their policy obligations. So what you are really doing is joining forces with other people to save a specific amount of money. You meet your specific need to save a specified sum of money regardless of the timing of your death. The insurance company charges a fee for this service, the cost of insurance, and is able to make additional profits when it invests your money. So when you step back you see this is a way for society to cooperate to make life more certain. So what good does the money do when you are dead? Life insurance is a way to save for yourself and your beneficiary. While you are alive, using permanent insurance, you can borrow against or withdraw your accumulated savings called the cash value of your policy. When you die, your beneficiary receives your savings, just as you would do if you left the person or organization the balance of your bank savings account when you die; insurance benefits may be paid immediately and need not be delayed by the winding up of your estate. So life insurance is about planning for a certain future for you and your beneficiary; it is not about profiting.
I don't believe in insurance. Why should someone profit when I die?
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I'm twenty-something, an only child, single and my parents are gone. I care for no one. What's in it for me?
Insurance protects you. Things change. As you grow older your priorities will change and you may
end up having a spouse or child depend on you later in life. When and if you do, would you prefer to
be prepared or in a bind? Insurance helps you manage life's uncertainties.
Setting up an insurance policy while you are young is less expensive and allows you to
accumulate wealth tax-free for a longer period of time. It is expensive to wait. In fact if you had life insurance from birth you could insure your retirement by the time you're in your forties.
What other types of insurance do you sell?
We specialize in life insurance, annuities, long-term care and disability insurance. We refer other types of risk management such as home, car and health insurance to other agencies licensed and specialized in these areas.
What types of life insurance are available?
Permanent life insurance, either Whole Life or Universal Life seeks to protect you your entire life. Insurance policies vary widely because of the criteria each insurance company sets for the people they cover and because of the "riders" or policy options provided.
Term life insurance protects you for a specific period of time typically from 1 to 30 years. These policies also vary widely and come with riders such as "return of premium" that refunds your premiums if you keep your policy to term.
How much coverage should I have?
Your coverage will depend on the number of people you intend to protect, your relationship with these people and the type of protection you desire for each. The fast answer to this question is to consider your current annual income and multiple this by 10 to 15. This will give you a ballpark figure. However, it is more complex since your current income level is not the level you expect in 20 years and may not be the income your loved ones will require. Further, it may not be feasible to buy more insurance each time you receive a significant pay raise. 877 Insurance Agency will guide you when determining an appropriate level of coverage.
How do I buy life insurance and choose the right company?
Buying life insurance is similar to buying clothes; one size or style does not
fit everyone and each tailor produces clothes of varying quality. What makes buying life insurance different from buying clothes is that you are buying something intangible. An insurance policy is an agreement for you to make future payments while the insurance company promises to deliver a future benefit; you don't get to touch or feel your benefit you just get a document that outlines this arrangement.
Imagine you see a pair of lovely shoes for your daughter in a catalog. Now image making monthly payments for the next 20 years to get those shoes but those shoes may not arrive for another 30 to 50 years. They will arrive; you don't know when they will arrive. The only thing you know with certainty is that you will not see how beautiful your daughter looks in these shoes. What things will you need to know before you place that order? What things will you have to estimate because they are in the future and how will you increase your confidence in your decisions?
Your insurance broker such as those with 877 Insurance Agency, helps you to determine the
appropriate insurance coverage. You should select a broker who has the knowledge and skill set to properly advise you on the many options. You should also select a broker with whom you have a connection. The most effective brokers take the time to understand you from a holistic perspective.
When selecting the insurance company, while the price and features are important considerations, because your policy promises something in the future, the financial strength of the insurance company must also be considered. Ratings agencies provide an opinion as to the long term viability of an insurance company. Your policy forms a long term relationship with the insurance company. As with your broker, you should feel comfortable and connected to the company.
How do I know if I'm getting the best rates?
As your insurance broker, we are obligated by law and our principles to find the best product
for you at the best rate. We do this by surveying several companies that are representative
of the types of insurance you seek. We can not survey the entire marketplace which consists of hundreds
of insurance companies. By providing a complete profile, we are able to illustrate several options and
recommend the most suitable.
What are the steps that I would go through?
- Let us help you determine the amount (face value), premium (future payments), type (term, return of premium, whole, universal, or disability), and riders (optional features) of coverage that suits your life goals and situation so that your beneficiaries are cared for suitably.
You may have already determined this so just let us know. - We survey the marketplace to present insurance companies with the appropriate policy.
- We help you complete an application for the policy and you provide your first premium pending
final approval of your policy by the insurance company's underwriting department. Often you are protected
from this point. Coverage will only lapse if the insurance company refuses the application or you
do not meet your obligation to pay your premiums. - Often the insurance company will require a medical exam which they arrange at no cost to you.
- The insurance company will review your information, use information from third party reporting
agencies such as credit bureaus and medical information bureaus before accepting, rejecting or making
a counter-offer to your application. - You meet your premiums and your policy remains in force.
Should I get insurance to pay off my mortgage if I die?
A mortgage is usually the largest obligation a family will have.
If you already have insurance that is not sufficient to cover a new mortgage,
you may want to consider temporary insurance such as term or return of premium insurance
that will expire once your home has been fully paid. Often permanent
insurance may work in this situation if it is a part of an overall strategy.
Building, Protecting and Preserving Your Wealth