Life Insurance Basics
 At AM Warner Insurance, we want to help you to make educated decisions on your selection of life insurance. There are several types of life insurance, let us help you to decide which one is best for your needs by .
AM Warner insurance can help you determine how much life insurance would be appropriate for you and which type of insurance best fits your needs. We are able to offer term life insurance and universal life insurance to clients located in Kentucky and Indiana. What Should You Know When Buying Life Insurance?
When you buy life insurance, you want a policy which fits your needs without costing too much. Your first step is to decide how much you need, how much you can afford to pay and the kind of policy you want. The next step would be to find out what various companies charge for that kind of policy. You can find important differences in the cost of life insurance by using the life insurance cost indexes. A good life insurance agent or company will be able and willing to help you with each of these shopping steps.
If you are going to make a good choice when you buy life insurance, you need to understand which kinds are available. If one kind does not seem to fit your needs, ask about the other kinds which are described on this page. Choosing the Amount of Life Insurance
One way to decide how much life insurance you need is to figure how much cash and income your dependents would need if you were to die. You should think of life insurance as a source of cash needed for expenses for final illnesses, paying taxes, mortgages or other debts. It can also provide income for your family's living expenses, educational costs and other future expenses.
Your new policy should come as close as you can afford to making up the difference between (1) what your dependents would have if you were to die now, and (2) what they would actually need. Choosing the Right Kind of Insurance
All life insurance policies agree to pay an amount of money if you die. But all policies are not the same. There are three basic kinds of life insurance.
- Term insurance
- Whole life insurance
- Endowment insurance
Remember, no matter how fancy the policy title or sales presentation might appear, all life insurance policies contain one or more of the three basic kinds. If you are confused about a policy that sounds complicated, ask the agent or company if it combines more than one kind of life insurance. The following is a brief description of the three basic kinds.
Types of Insurance
Term insurance is death protection for a "term" of one or more years. Death benefits will be paid only if you die within that term of years. Term insurance generally provides the largest immediate death protection for your premium dollar.
Some term insurance policies are "renewable" for one or more additional terms even if you health has changed. Each time you renew the policy for a new term, premiums will be higher. You should check the premiums at older ages and the length of time the policy can be continued.
Some term insurance policies are also "convertible". This means that before the end of the conversion period, you may trade the term policy for a whole life or endowment insurance policy even if you are not in good health. Premiums for the new policy will probably be higher than what you have been paying for the term insurance.
 Whole life insurance gives death protection for as long as you live. The most common type is called "straight life" or "ordinary life" insurance, for which you pay the same premiums for as long as you live. These premiums can be several times higher than you would pay initially for the same amount of term insurance. But they are smaller than the premiums you would eventually pay if you were to keep renewing a term insurance policy until your later years.
Some whole life policies let you pay premiums for a shorter period such as 20 years, or until age 65. Premiums for these policies are higher than for ordinary life insurance since the premium payments are squeezed into a shorter period.
Although you pay higher premiums, to begin with, for whole life insurance than for term insurance, whole life insurance policies develop "cash values" which you may have if you stop paying premiums. You can generally either take the case, or use it to buy some continuing insurance protection. Technically speaking, these values are called "nonforfeiture benefits". This refers to benefits you do not lose when you stop paying premiums. The amount of these benefits depends on the kind of policy you have, it's size, and how long you have owned it.
A policy with cash values may also be used as collateral for a loan. If you borrow from the life insurance company, the rate of interest is shown in your policy. Any money which you owe on a policy loan would be deducted form the benefits if you were to die, or from the cash value if you were to stop paying premiums.
One type of whole life policy is universal life insurance. Universal life insurance is a flexible premium life insurance policy under which the policy owner may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates, which may change from time to time.
An endowment insurance policy pays for a sum or income to you, the policyholder, if you live to a certain age. If you were to die before the specified age, the death benefit would be paid to your beneficiary. Premiums and cash values for endowment insurance are higher than for the same amount of whole life insurance. Thus endowment insurance gives you the least amount of death protection for your premium dollar.
We Can Help
AM Warner insurance can help you determine how much life insurance would be appropriate for you and which type of insurance best fits your needs. We are
able to offer term life insurance and universal life insurance to our clients in Kentucky and Indiana. You can contact us online via our , we look forward to providing for your insurance needs.
Nationwide Referrals
AM Warner Insurance is licensed to provide insurance products in Kentucky and Indiana. If you are outside this area, a referral to an agent in your area is available; all you need to do is , and we'll have someone contact you right away. We provide referrals nationwide!
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