How life insurance works (and works for you)

An inside look

Scuba diving in shark infested waters might be your thing – which is totally cool. But it may also mean you’re more likely to pay a higher life insurance rate. That’s because dangerous hobbies, even ones not quite as extreme as swimming with large aquatic life, put you more at risk and hike up your rate.

This is just a basic example of how life insurance works. Life insurance can be a pretty complicated subject matter, which is why we want to break it down for you. This inside look will give you a better understanding of life insurance and help you make the right decision when it’s time to get the coverage your family needs.

Breaking it down

When you buy life insurance, you’re entering into a contract with your selected provider. You pay the insurance provider for a policy on a monthly, quarterly or yearly basis to keep the policy active. In turn, the insurance company pays your chosen beneficiary or beneficiaries – either as a lump sum or in installments – if you pass away while the policy is active. The payment is often referred to as a death benefit.

What does a death benefit cover?

When you’re setting up a policy it’s important to think about all your expenses in your life along with the people who rely on you for financial support. Your beneficiaries will often use a death benefit they receive to cover:

• The mortgage
• Educational expenses
• Daily living expenses
• A trust
• Donation to a charity or cause
• Final expenses (funeral and burial costs)

Factors that impact rates

Life insurance rates are based on a number of factors. Some of these factors are out of your control, like your age, gender, driving record, medical history and your family’s health history. But engaging in behaviors like shark diving and other risky activities could drive up the cost. Cigarette smoking, alcohol consumption and your diet could also lead to higher monthly payments. But you can take steps to better your health, so you can save money.

Your coverage options

Whatever it is you’re looking for, we have policies tailored to fit your needs. Take a look at all of our coverage options so you can make the best, most informed decision possible when it’s time to purchase a policy. You can also calculate your needs to see how much it will take to ensure your family members are taken care of.

How to file a claim in four easy steps It is essential that you let your beneficiaries know about your policy so that they have the information handy when they need to file a claim. Here’s how a beneficiary can file a claim:
	Locate the life insurance policy If you don't know where the policy is, a good place to look is where other financial documents are kept.
	Contact the insurance company A company representative will walk you through the specifics. You will need proof of death and completed claim form to file for the death benefit.
	Choose how you would like to receive the payment The proceeds are typically paid to the beneficiary in a lump sum, but you can also opt to receive installment payments or have the amount held in an account that earns interest. A tax advisor or attorney can help you decide which option makes sense for you.
	Await payment The insurance company will issue the payment after verifying that everything is in order. A check can be sent to you or the funds can be electronically deposited into your bank account.

How does life insurance differ from accident or dismemberment insurance?

It’s simple: Life insurance pays the beneficiary regardless of how the policyholder passes away. In the case of accident or dismemberment insurance, your beneficiary only receives payment if the policyholder dies in an accident, which includes:

• An automobile accident
• An airplane or travel accident
• Falling off a ladder outside your home

Get a complete breakdown on accident insurance and see if it’s right for you.

Still need to know more?

We know life insurance can seem complicated. Our experienced agents are here to help answer any questions you may have. Take the first step to help protect what matters most to you by calculating your life insurance needs or getting a quote.