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Life Insurance 101

Learn the ins-and-outs of life insurance and how it works.

New to life insurance and finding it a little confusing? You’re not alone. Life insurance can seem complicated, with numerous choices and factors to consider. As your partner throughout the process, AAA Life is here to help make it easier.

Life Insurance 101

Learn the ins-and-outs of life insurance and how it works.

New to life insurance and finding it a little confusing? You’re not alone. Life insurance can seem complicated, with numerous choices and factors to consider. As your partner throughout the process, AAA Life is here to help make it easier.

How Does it Work?

Life insurance can be a reliable and flexible way to help those who are left behind after you’re gone. When you purchase a policy, you’ll begin paying a premium. Your payments keep your policy active. In turn, should you die while your policy is in effect, your life insurance provider will pay out death benefits to your beneficiaries, following your wishes.

What Kind Should I Get?

Term life insurance can be a great way to help cover specific expenses—like a mortgage or college tuition—or provide “just-in-case” protection for those you care about. Premiums are level for a set period of time.

LEARN MORE ABOUT TERM LIFE >

Whole life insurance can give you lifelong coverage with set benefits and premiums that never change. Your policy can also accumulate cash value that you can borrow against.

LEARN MORE ABOUT WHOLE LIFE >

Universal life insurance can provide a lifetime of coverage with flexible premiums and benefits to help meet your specific needs. Your policy can build cash value to help pay for expenses during retirement and more.

LEARN MORE ABOUT UNIVERSAL LIFE >

Depending on your needs, one type may make more sense for you than the others. To learn more about what to consider before you buy, visit our Getting Started page.

What Does It Cover?

It may be difficult to think about—but at its core, life insurance is designed to help cover loss of income, funeral expenses, and other financial needs those you care about may have should you die unexpectedly.

Many life insurance policyholders designate death benefits to cover end-of-life costs, but life insurance coverage can be used in a number of other ways as well. Your benefits can help your family cover their cost of living, pay outstanding debts, provide charitable gifts, and more.

Why Should I Have It?

Life insurance is a great way to help protect those you care about.

Should you die unexpectedly, chances are your family may not be able to cover items such as funeral costs, medical bills, mortgage payments, funding retirement plans, etc. With life insurance, you can help ease financial burdens while they are going through a very difficult and emotional time.

When Should I Get it?

If you’re single, your life insurance policy can help you plan for the future while you’re healthy, which in turn can keep premium prices down. It can help you cover debts that you don’t want to pass on to family members and provide financial support for aging parents or siblings.
If you’re newly married, you may want to use your policy to help cover your household’s daily living expenses, such as your mortgage or utility bills. Your benefits will also help ensure that your spouse is able to pay for any outstanding debts or final expenses.
If you have a family, you’re probably concerned about providing for your kids. Your life insurance policy could cover your family’s day-to-day activities and living costs, as well as funding their future expenses, like college tuition.
If you are planning for retirement, life insurance can help you make the transition out of employment. It can preserve your retirement plan by replacing life insurance benefits you may have previously received from your employer.
If you’re retired, your life insurance benefits help ensure that you leave a legacy. You could allocate an inheritance or make a charitable donation, cover the cost of estate taxes, or replace income you previously received from a pension.

What Can Life Insurance Be Used For?

Life insurance is a powerful, versatile tool for protecting not only your family, but also your legacy. It doesn’t have to be limited to paying off final expenses. Life insurance can also be used to help:

• Provide ongoing income for your family 
• Make a gift to your favorite charity 
• Leave an inheritance 
• Protect the future of a small business, and more!

Ask your AAA Life Insurance agent for more information about how our products can meet your unique needs. Call (800) 684-4222.

How Much Should I Have?

Deciding how much life insurance you need begins with one basic question: What would life be like financially for those you care about if you were no longer there?

While it may be difficult to think about the answer to this question, it’s important to take stock of your needs today. With too little coverage, your family might not receive all the financial protection you would like them to have.

To learn more about what you should consider when buying life insurance and to get an estimate based on your personal needs, try our Needs Calculator.

Calculate Your Needs