Complete Guide to Life Insurance

complete guide to life
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Life insurance is a type of financial protection that you can purchase in order to help provide for the people who depend on you. Life insurance can be used to pay off debts, cover funeral costs, and more. There are many different types of life insurance policies available and it’s important to understand what each one does before making a decision. In this blog post, we’ll discuss everything from coverage types and different types of life insurance policies to how much life insurance will cost you and when you might need it. We’ll also go over some common terminology so that you feel confident about your decisions! Let our team of agents in Ohio, Indiana, West Virginia, and Maryland help you work through any questions you might have about life insurance today. 

What is Life Insurance?

Life insurance is financial protection that you can purchase in order to help provide for the people who depend on you. Life insurance could be used to pay off debts, cover funeral costs and more. There are many different types of life insurance policies available and it’s important to understand what each one does before making a decision about which policy would work best for your needs.

Who Needs Life Insurance?

There are various factors that can determine whether or not someone needs life insurance, but in general you may need it if:

  • You have dependents who would be financially impacted by your death such as a spouse and children.
  • Your family relies on the income from your job to live comfortably.
  • You own a home where there is still mortgage debt attached to it after paying off the original down payment of equity (i.e., you owe more than what your house is worth).
  • You carry high balances on credit cards, student loans or other types of personal financial obligations that will leave those debts unpaid upon your death. In this case, life insurance could help pay for these remaining debts so they don’t end up for your family to pay off.
  • You are self-employed and would be unable to provide income upon your death

Do single people need life insurance? 

What are the Different Life insurance Policies?

Whole Life Insurance:

Whole life insurance is a policy that lasts your entire lifetime. This type of coverage pays out an agreed upon lump sum amount to the beneficiary you choose if you pass away during the duration of this policy.

Term Life Insurance:

Term life insurance, on the other hand, doesn’t last forever and will only pay out benefits until it expires or when death occurs (whichever comes first). You can purchase term for any number of years up to 20-30 years depending on how much money/benefits are needed at what point in time.

Universal Life Insurance:

Universal life insurance is a policy that can be bought for any amount of time, usually between 20-30 years and it will pay out benefits to your beneficiaries when you die.


Annuities are long-term investments that you can invest in and then receive a certain amount of money every month or year from the insurance company.

Supplemental Life Insurance:

This type of coverage is usually purchased by people with large debts such as credit card debt, or student loans because it pays out benefits to your beneficiaries upon your death even if the policy does not have any cash value left. It’s important to note that this type of coverage is typically more expensive. 

How Much Life Insurance do I Need?

The answer to this question depends on many factors including how old you are, how many dependents you have and what your personal financial obligations are. In general, the life insurance payout should be enough to cover any outstanding debt/obligations as well as expenses for funeral costs and other related fees.

What is the Application Process for Life Insurance?

Fill out an application.

Fill out the application with accurate information, providing any and all necessary documentation. This includes things like a social security number as well as your annual income (and other sources of money such as investments). It’s recommended to contact an agent that can talk through different options/coverage types available in order for you to make an educated decision about what coverage is best for your needs.

Provide personal detailed information.

Providing personal details such as medical information and family history is also necessary so your insurer can calculate accurate premiums for your policy. If you’re younger than 35 then it’s likely that the insurance company will require a physical exam to ensure anyone in this age group isn’t at risk of developing certain health issues later on down the road, which could lead to higher premiums. 

Provide personal health history

Most insurance companies will also require proof of a physical exam within the last two years. If they do, then it’s important to provide this information in order for them to continue with calculating premiums based on your health history. 

Provide your family health history.

Don’t forget to mention if you have any family history of cancer, heart disease or diabetes.

What Could Potentially Disqualify You from Getting Life Insurance?

Medical History- if you have a medical condition that is considered a pre-existing condition.

Employment Status – If your job has an exclusivity clause which states they can’t offer coverage to their employees. This would include groups like doctors, nurses etc.

Negative Driving Record: This can lead to either a higher premium or rejection outright.

Income: If you’re starting with an income that is considered too high, then the insurance company may refuse coverage altogether.

Hazardous Occupation: Certain occupations can lead to higher premiums.

Know Your Life Insurance Terms

Policyholder: The person who owns the policy.

Policy Owner: The person that is covered in the event of a death or terminal illness/injury.

Death Benefit: This is what will be paid out to your beneficiaries if you die.

Term Life Insurance Benefits: Term life insurance benefits are typically paid out at once, while whole life policies may pay for a set amount of years.

Payment Schedule: This is the payment schedule that will be required in order to maintain your policy with premiums, and this can vary depending on policy type and coverage level.

Cost (Premium): The cost for insurance which covers a given period of time; these are also known as payments or installments/installments.

Beneficiary: The person who will receive the death benefit.

Insurance Agent: This is a professional that provides insurance services to policyholders and companies, providing advice/support as well as handling the paperwork in regards to policies and contracts. They’re usually not licensed but they are authorized by an insurance company so their qualifications are regulated (such as experience, education).

Life Insurance Agents: This is a person that works for an insurance company and can provide you with information about the different types of life insurance policies. They’re also able to answer any questions you might have such as how much coverage would be necessary or what the cost would be based on your needs/budget.

Cash Value: The amount of money that is in the policy which has accumulated over time.

Riders: These are additional benefits that can be added on to a life insurance policy which will provide more coverage than the main type of policy. They’re also able to cover specific expenses such as education or funeral costs.

Disclaimer: This blog post is meant for general informational purposes only and may not reflect your specific policy.

About the Author: 

Alekha is an expert in the insurance space and has been with the Malhotra & Assoc. Insurance team since its inception. Alekha provides expertly written and researched content for the Malhotra & Assoc. Insurance agency.

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