{"id":605,"date":"2019-11-21T14:15:55","date_gmt":"2019-11-21T22:15:55","guid":{"rendered":"https:\/\/www.insureone.com\/knowledge-center\/?p=605"},"modified":"2025-05-19T12:51:34","modified_gmt":"2025-05-19T19:51:34","slug":"what-is-life-insurance","status":"publish","type":"post","link":"https:\/\/www.insureone.com\/knowledge-center\/life\/life-insurance-basics\/what-is-life-insurance\/","title":{"rendered":"What is Life Insurance?"},"content":{"rendered":"\n<p>Most\npeople have a general idea of what life insurance is, but if they haven\u2019t done\ntheir research they may not realize what an important tool it can be to insure\nthe financial future of loved ones. <\/p>\n\n\n\n<p>Life\ninsurance policies not only serve to pay for unexpected funeral expenses, but\nthey can also serve to replace lost income, cover everyday expenses, pay for\noutstanding debts and more. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Does Life Insurance Work?<\/strong><\/h2>\n\n\n\n<p>A\nlife insurance policy\nis essentially a contract between an individual and an insurance provider that,\nin exchange for a monthly premium, the insurance company will pay a lump sum to\na designated individual should the insured unexpectedly pass away. <\/p>\n\n\n\n<p>When\nyou purchase a life\ninsurance policy you will have to choose:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A beneficiary<\/strong>.<br>A beneficiary is a person who will receive the proceeds of your life insurance<br>policy should you pass. <\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The amount of coverage. <\/strong>You<br>will have to determine the amount the policy will pay-out, which is also known<br>as the death benefit. The amount can vary significantly from a few thousands to<br>millions. <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Types of Life Insurance<\/strong><\/h2>\n\n\n\n<p>The\ntwo categories of life insurance that you should be aware of are: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Term life insurance<\/strong><strong>\u2013<br><\/strong>just like the name, term life insurance is a policy that is purchased to protect you<br>for a specific term or set length of time. Policies are typically purchased for<br>10, 20 or 30 years. If you are still living when the policy term concludes then<br>the policy ends.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Permanent life insurance<\/strong>&#8211; this includes universal and whole life insurance, which provide lifetime coverage. Permanent life insurance can be significantly more expensive than term life insurance; however, it offers unique and valuable benefits. <\/li>\n<\/ul>\n\n\n\n<p>In\ndeciding which type of policy is right for you, it is important to consider why\nyou want life insurance in the first place. <\/p>\n\n\n\n<p>Term life insurance\nmay be the right fit for you if you want to ensure that your family can make\nends meet if you were to die unexpectedly. For example, a term life policy\nwould make it possible for your family to continue paying for childcare, the\nmortgage or your children\u2019s college educations. While these expenses are\nsignificant to you at this current stage of your life &#8211; in 20 or 30 years they\nmay not be as substantial since your home would likely be paid off and your\nchildren would be grown with possible careers and families of their own.<\/p>\n\n\n\n<p>On\nthe other hand, if you seek a policy that adds a little more value, then a whole life insurance\npolicy may be a better option for you. Whole life policies offer a number of\nbenefits including the fact that they accumulate a guaranteed cash value over\ntime. You can borrow or withdraw funds against the policy. Whole life insurance\npolicies also offer the potential to earn dividends as well as fixed premium\nrates that will not change as you age or your health status changes. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Much Life Insurance Do I Need?<\/strong><\/h2>\n\n\n\n<p>The\namount of life insurance you need is ultimately based on your goals. If you are\npurchasing life insurance to ensure that your dependents will be able to live\ncomfortably without your income then you should buy enough coverage to replace\nthat income. You should also add funds to cover additional expenses your\nsurvivors might incur such as the need to relocate or increased childcare\ncosts. <\/p>\n\n\n\n<p>If\nyou are considering life insurance because you want to leave your family an\ninheritance then this goal would be based on the amount you want to leave and\nthe premium you can ultimately afford. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Much Does Life Insurance Cost?<\/strong><\/h2>\n\n\n\n<p>The\ncost of a life insurance\npolicy is dependent upon a number of factors including the type of\npolicy you select, the amount of coverage you choose as well as your health and\nyour age when you purchase the policy. <\/p>\n\n\n\n<p>Life insurance companies\nuse different systems to determine premiums. Consider life insurance quotes from a number of\ncompanies in order to find a policy with the coverage and premium that works\nbest for your needs. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>When Should I Buy Life Insurance?<\/strong><\/h2>\n\n\n\n<p>If\nyou are concerned about affordability, the optimal time to buy a life insurance\npolicy is now \u2013 or as soon as possible. Individuals who get the best life insurance rates\nare those who are young and healthy. <\/p>\n\n\n\n<p>There\nare also a number of life events when you should consider investing in life\ninsurance. Examples include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Getting married. <\/strong>When<br>couples get married they tend to take on greater expenses such as renting a<br>bigger apartment or buying new cars. If you were to unexpectedly pass, would you<br>want to leave your spouse to pay these expensive monthly payments on their own?<br>In addition, in the event of your untimely death, your spouse could be<br>responsible for any outstanding debts you have. That concern would be<br>eliminated with an investment in a life insurance policy.\u00a0\u00a0\u00a0 <strong>\u00a0<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Buying a home. <\/strong>If<br>you buy a home and take on a mortgage payment then you may want to invest in a life insurance policy to<br>cover your mortgage debt.\u00a0 <\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Having a child.<\/strong><br>According to the U.S. Department of Agriculture, it costs approximately<br>$233,610 to raise a child to adulthood. Becoming a parent is a good time to<br>consider investing in a life<br>insurance policy in order to secure your child\u2019s financial future. <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Do I Need Life Insurance?<\/strong><\/h2>\n\n\n\n<p>Now\nthat you understand your options and the potential costs, you may still be\nwondering, \u201cis life\ninsurance worth it?\u201d However, the real question you should ask yourself\nis can you afford to go without life insurance? <\/p>\n\n\n\n<p>There\nare a number of situations in which you should consider life insurance such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If<br>you do not have dependents, but are concerned about family members having to<br>pay for your funeral expenses. <\/li>\n\n\n\n<li>If<br>you want to create an inheritance for your loved ones or give to a charity.<\/li>\n\n\n\n<li>If<br>you are the sole provider and your family depends on you for financial support.<br><\/li>\n\n\n\n<li>If<br>you are the primary caregiver for your family and your death would lead to<br>increased costs for necessities such as childcare. <\/li>\n\n\n\n<li>If<br>you own a home with a mortgage or have other debts. <\/li>\n<\/ul>\n\n\n\n<p>If any of these situations apply to you or you are curious about learning more about life insurance, reach out to a licensed agent at InsureOne to get a quote by calling <strong><a href=\"tel:800-467-1958\">(800) 467-1958<\/a><\/strong> or by requesting a free quote online. The sooner you obtain a policy, the lower your premiums will be.  <\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-1 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-fill\"><a class=\"wp-block-button__link has-very-light-gray-color has-vivid-red-background-color has-text-color has-background wp-element-button\" href=\"https:\/\/www.insureone.com\/auto-insurance-quote\/\"><strong>Get a Quote<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-2 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-vivid-red-background-color has-background wp-element-button\" href=\"tel:800-836-2240\"><strong>Call Us<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-3 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-vivid-red-background-color has-background wp-element-button\" href=\"https:\/\/www.insureone.com\/find-an-office\/\"><strong>Find Your Office<\/strong><\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Most people have a general idea of what life insurance is, but if they haven\u2019t done their research they may not realize what an important tool it can be to insure the financial future of loved ones. Life insurance policies not only serve to pay for unexpected funeral expenses, but they can also serve to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45],"tags":[],"class_list":["post-605","post","type-post","status-publish","format-standard","hentry","category-life-insurance-basics"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/605"}],"collection":[{"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=605"}],"version-history":[{"count":8,"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/605\/revisions"}],"predecessor-version":[{"id":4303,"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/605\/revisions\/4303"}],"wp:attachment":[{"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=605"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=605"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.insureone.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=605"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}