Why Life Insurance?
What happens if you are not here to contribute to your household? Would your family be able to continue to live the life that you worked so hard to provide? Could your family keep their home? Would your kids be able to go to college one day?
Life insurance helps your family in so many ways:
- Provide income that will help financially protect those you love
- Help make sure your family can stay in your home
- Cover college expenses or pay off debts
- Leave a financial legacy free of federal income tax for your loved ones
- Help cover childcare expenses because of the loss of a parent
- Final expenses
There is no such thing as “one size fits all” in life insurance. We can quickly show you different life insurance choices that may apply to your family’s needs, at a manageable value, so you may decide for yourself.
What is Term Life Insurance?
Simply put, term insurance is a specific amount of coverage guaranteed for a specific period of time. Because the length of time can vary based on what term you choose, these policies provide the biggest bang for your buck out of any life policy offered.
Who takes a term policy?
Typically, parents and younger spouses will take term policies. Usually when we are younger, we have more expenses for raising a child. Kids play sports, have piano lessons and go off to college, right? In fact, it costs about $235,000 to raise a child today. The term policy, because it is not forever, allows you to qualify for a large amount of coverage for minimal cost.
Roughly how much coverage should I have?
Normally, it is recommended that you have 7x your annual income. For example, if you make $50,000/year you would want to have at least $350,000 in life insurance. This can vary, though, when considering the ages of your dependents and your life situation.
Term policies can often be converted (in whole or partially) into a permanent policy. The benefit of this conversion period is that you may not have to go through underwriting at a later date in order to qualify!
What is Permanent Life Insurance?
Permanent life insurance is designed to last your lifetime. It costs more money compared to term insurance but it also has a cash value to it. As long as you pay the premiums and do not withdraw funds from it, the full face amount will be paid.
Three types of permanent life insurance**
**This might be more information than you’re looking for, but just in case you’re wondering…
- Whole life: This policy will gain cash value and the death benefit will not change. You can borrow against your cash value and even withdraw the accumulated cash value if you wish.
- Universal life: This is very flexible life insurance. You can adjust your premium and/or death benefit at any time. A significant increase in coverage may require a new medical exam, FYI.
- Variable life: This policy has a lot to do with investment performance of the insurance company’s assets. You are allowed to choose your investment vehicle between a money market fund, a bond fund or a stock fund.
Who takes a permanent life policy?
People with a great deal of assets at any stage in their life will benefit from a permanent life policy. Children’s policies are permanent. Empty Nesters often will do permanent life to eliminate the burden of final expenses for their loved ones.
While permanent policies cost more, they are designed to build a cash value that you have access to. Sometimes people will eventually let the accumulated cash value make the payments on the policy. Most permanent policies guarantee a rate for coverage until age 100.
Permanent life insurance is not a contract that you are bound to. Just like with a term policy, you may cancel a permanent life policy with no penalties.
No. Life insurance benefits are tax free and they circumvent probate when a specific beneficiary is named.
No, usually not. Most work policies only last as long as your employment. Also, work policies are seldom enough coverage. Life insurance is a specific tool to perform a specific job. If you started to build a tree house for your son/daughter and you pulled out a plastic hammer, technically you have a hammer but not necessarily the correct hammer to take care of the job.
No, not always. Some policies do not require it so if you have personal issues about medical exams, you don’t always need to have one to get a policy.
It depends on your stage in life. If you are a parent with children in the home, term policies are more beneficial because they provide a greater death benefit for the least amount of money. The death benefit is guaranteed for a specific time period. Many parents gauge this term period around the age of their children. If you are someone who is older and has kids who have grown up and moved on, you may want a permanent policy that will last until you’re 100!
Yes, and they are very reasonable. There are many benefits to a children’s life policy. Ask us about these benefits and we’ll be glad to help!
These policies are definitely available. The policy most older people obtain would be a smaller policy which takes care of final expenses. The average cost of a funeral now is around $20k, so these policies are very popular!
Nope. You would pay your first estimated premium with the application. This is totally refundable, though, if you are denied insurance or decide to pass on a policy offered to you.
At the Ekstrom Agency, we’ve been Northwest residents our entire lives. When we appreciate our area, we think about the many families we serve. Although we are all different, we all face the same risks. As a Northwest-based business, we know the importance of building a solid foundation for the future.
In fact, our agency has been in the same location since 1980! We can offer many types of insurance that are affordable and provide easy access to us in person, over the phone, or through our Website- wherever and whenever you need. We also know how important value and service are to our customers.
We are all family, and we’d like the opportunity for you to join ours at the Ekstrom Agency. Here, we treat everyone like one of our own family members, with the highest level of compassion and respect. We look forward to helping families like yours protect the things that matter most – your family (life insurance), home, car and much more. Fill in your information for a quote and See How Well You Sleep Tonight!
F. (509) 467-3307
8607 N Division St, Ste A
Spokane, WA 99208
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Available 24/7 at (509) 467-6520