Life Insurance Basics Life insurance is purchased for the financial protection of surviving dependents. It can help pay the expenses that the insured’s income would have normally covered, including mortgage payments, bills, and a dependent’s child care or college tuition. A comprehensive Needs Analysis is a dependable way to calculate the level of financial need for surviving family members. Your agent can help with this process. Examining current and future financial needs will help determine the amount and type(s) of insurance plan to purchase. Because of the vast difference in individual and family needs, there is no one plan that fits everyone. A Hermann Sons Life agent can help determine what is right for each client. It may be best to combine two or more plans to meet financial needs. For example, a Whole Life plan plus a Term Life plan can be utilized for current needs, but in the senior years the Whole Life plan alone may be adequate because of the anticipated lower financial protection needs. There can be a significant savings in premium cost when buying the Whole Life plan at a younger age because premiums are based on age and current health status. Life insurance can generally be classified as either Whole Life or Term Life. Whole Life certificates typically provide a variety of features and benefits in addition to the death benefit, and typically cost more. The key feature of Whole Life insurance is a cash value component that accumulates over time and may be borrowed against, depending on the terms of the certificate. Another feature of a Hermann Sons Life Whole Life certificate is a level premium that does not increase over the life of the certificate. Term Life coverage is usually less expensive. Term Life certificates take their name because coverage lasts for a specific period of time – such as 1, 10 or 20 years – or until the insured reaches a certain age. The cost of a Term Life certificate generally increases as you get older. Term certificates do not include a cash value component and only pay a death benefit during the term of the certificate. Some Term Life certificates are renewable and some are convertible to Whole Life. When purchasing a Term Life certificate it is always best to have a good idea of how long you want coverage. This will help you in deciding what Term plan to choose.
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CLIENT RESOURCE SECTION
Revised 05/01/2023
