Basic Life insurance FAQs
Below are a few questions clients ask most often, along with simple, digestible answers you can share with them.
- Do I really need life insurance if I’m young and healthy? While it might not feel necessary when you’re young and healthy, investing in life insurance can be a salient financial move. Not only is life insurance often most affordable when someone is younger and in good health, but it also provides protection for loved ones in case something unexpected happens.
- What is term life insurance? Term life is life insurance that covers a specific period of time, often 10, 20, or 30 years. If the insured passes away during that term, the policy pays a death benefit to the beneficiary. Since it is temporary coverage and does not build cash value, it can be a more budget-conscious option.
- What is whole life insurance? Whole life is a permanent coverage that is effective for the entirety of the insured’s lifetime, assuming premiums are paid. Whole life coverage also builds cash value over time, and because it includes both lifelong protection and a cash value component, premiums can be much higher than those of term life policies.
- How much coverage should I consider? The right amount of coverage depends on your individual situation, but there are general factors that can influence your decision. Clients with children may want to account for future education expenses, while others may want to consider income replacement in retirement, debt payoff, and ongoing household needs. This question often opens the door to a more meaningful needs-based discussion.
- How much will it cost? Pricing for life insurance depends on several factors, including age, health, gender, family medical history, occupation, lifestyle, policy type, and coverage amount. As a current benchmark, a healthy 40-year-old buying a $500,000, 20-year term policy may pay about $26 per month on average.
I hope that you found this FAQ guide helpful. These kinds of questions can create valuable opportunities to build trust and move the conversation forward.
As always, if you would like help working through a client case or getting a life insurance quote in motion, don’t hesitate to respond to my email or give me a call here. I am always happy to help.