Peace Of Mind Insurance: How Life Insurance Works

May 1, 2020

Life insurance protects your loved ones in the event of an unexpected disability, diagnosis, or death. It can provide financial protection if you’re unable to work, and it can safeguard your family’s financial future against a sudden downfall.

When you first start shopping for life insurance, you’ll realize there are countless options available. We’re covering how life insurance works and which policy could best fit your needs.

How a life insurance policy works

When you fill out an application for life insurance, it will be reviewed by the insurance company to determine your eligibility. The insurance company will determine if you are approved for coverage based on your age and health (as well as a few other notes from your application). Most applications are approved very quickly if you don’t need to undergo a medical exam.

Once your policy is approved, you will begin to pay the premium on a monthly, quarterly, or annual basis to keep your policy in force. You will also designate a beneficiary who will receive the death benefit if you pass away during the coverage period you selected in your application. As long as you pay your premiums on time, your policy remains in force and you can have peace of mind knowing your loved ones are financially protected.

Life insurance prices

In general, life insurance is very affordable, and you can find a policy for almost any budget. Younger, healthier individuals usually secure a lower premium, so it’s important to apply for life insurance sooner rather than later.

Your life insurance premium depends on several different factors, including:

  • Age
  • Gender
  • Health at the time you apply for coverage
  • Nicotine use
  • Lifestyle (cost could go up if you participate in any risky activities such as skydiving, scuba, or base jumping)
  • Planned travel (your risk level could go up if you are visiting a country previously affected by a health crisis)

The application process

You will usually begin the application process by requesting a quote online for life insurance. Once you start the application with an agent or online, you might have to provide a family medical history, a list of medications you are currently taking, or medical records.

If you want affordable coverage with a quick approval rate, request a quote for term life insurance.

Many carriers do not require a medical exam, but if you need one, the application process could take more time. In this case, your insurance carrier will need to review your medical exam and then examine the risk involved with approving your coverage.

Types of life insurance

There are many different types of life insurance. Depending on your financial goals, your lifestyle, and your health, there is a policy fit for you. Below are a few of the most popular types of life insurance.

  • Term life insurance: coverage is very affordable, you’re essentially “renting" coverage for a term anywhere from 10-30 years
  • Mortgage protection insurance: a type of term life insurance designed for homeowners; this policy covers your mortgage payments in the event of death or disability
  • Universal life insurance: permanent coverage that lasts a lifetime, offers flexible premium payment options and has a cash value savings component
  • Final expense insurance: death benefit covers all expenses related to your passing (funeral, burial, medical costs, memorial expenses)
  • Critical illness insurance: pays a lump sum if you are diagnosed with a critical illness or condition specified in the policy to help you pay medical bills, mortgage payments, or seek alternative treatments that might not be covered by your health insurance
  • Disability insurance: replaces a major portion of your income if you are no longer able to work due to an illness or injury; many people consider this insurance a form of “paycheck protection”
  • Smart Start: a life insurance policy with a built-in cash value savings plan that your child can use later in life to fund a college education, put a down payment on a home, etc.

Adding riders to your policy

Did you know that you have the option to customize your life insurance policy with add-ons called riders? Life insurance riders can help you prepare for unexpected events that may arise while you are alive – these are called living benefit riders. Learn more about living benefit riders here .

Return of premium rider is another popular option that reimburses you for all the premiums that you paid into your policy if you live past the term of the coverage.

Next steps

If you are ready to enjoy all the benefits life insurance has to offer, get started today by requesting a quote for more information.

Our agents offer in-home appointments and video conference appointments to help you get a policy in place in a few simple steps. Your Symmetry agent can walk you through the entire process and help you get the best-fitting coverage for your needs and budget, all from the comfort of your home!


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