Life Insurance
What is it?
In short, life insurance in a contract between you and an insurance company that pays a lump sum of cash to beneficiaries of your choosing upon your death.
Types of Life Insurance
There are three main types of life insurance policies
Term Life
For those looking to get started with the simplest form of life insurance. Term life is how it sounds – guaranteed coverage for a specific amount of time with options to upgrade in the future if you have the need.
Whole Life
For those looking for guaranteed growth and guaranteed protection down the road. Whole life policies accumulate cash value over time that you can access at any time. This is the second most common type of life insurance.
Universal Life
For those looking for long-term growth and protection. Universal life allows you the option to adjust your premiums and or coverage amounts as your life changes. This type of life insurance is the most flexible, unlike term or whole life.
Did You Know?
You can customize your life insurance policy with optional add-ons called riders.
Comparison of Types of Life Insurance
| Term Life | Whole Life | Universal Life | |
|---|---|---|---|
|
Death Benefit |
Yes, Fixed Time |
Yes, Permanent |
Yes, Permanent |
|
Builds Cash Value |
No |
Yes |
Yes |
|
Average Cost |
Low |
High |
Med - High |
|
Flexible Premium |
No |
No |
Yes |
Term life is a great choice for most individuals due to it being the cheapest option and the most simple form of life insurance. Term is great for covering lost income needed for mortgage payments or college tuition. Permanent policies are extremely complex and are great for situations such as retirement planning, cross-purchase plans, and key-person insurance.
This is a brief comparison and there are nuances to each type of policy and even more types not covered in the chart. Keep in mind that each type of policy has advantages and drawbacks depending on the situation and you should consult a licensed expert before deciding to pull the trigger.
Determining the Cost of Life Insurance
Life Insurance premiums can vary widely between individuals
Age
This seems obvious! But most don't know that a life insurance policy can increase by 8-10% each year you wait.
Health
Life insurance boils down to risk. Can the company afford to take you on as a risk? The healthier you are, the more likely your premiums will be lower.
Policy Type
We briefly glanced over this in the chart above but the type of policy greatly affects the cost of insurance. Other factors are term length and face amount.
Family History
The apple doesn't fall far from the tree concept applies to life insurance. Family history of cancer and heart disease can increase premiums.
Gender
Women tend to live longer than men. Meaning insurance doesn't have to pay out as soon. Thus women typically pay less for a policy compared to men.
Occupation
Some jobs are riskier than others. Pilots, loggers, oil rig workers, and commercial fishers can expect higher premiums compared to an IT consultant.
Lifestyle
Much like your occupation, certain hobbies are risky and can increase premiums. Think along the lines of skydiving, scuba diving and base jumping.
Tobacco
Tobacco users tend to pay 2-3 times more in premiums compared to non-smokers. This includes vaping, chewing tobacco, and cigars. Stop using tobacco.
Just like you get different rates with different auto insurers, each life insurance company is different. Companies weigh each of the above factors differently. There are companies that are more affordable for smokers or more forgiving for those with bad family history. Synergize Financial gathers quotes from many companies to help you find the right policy and the best price.
Not Sure How Much You Need?
This easy to to use calculator can help you determine how much life insurance you might need. When you are ready to pull the trigger, there is a short form you can fill out for a quick quote.
FAQs
Here are the most frequently asked questions from our clients. Feel free to give us a call if there is something we didn’t answer for you!
That’s great! Life insurance through work is a nice perk but usually doesn’t cover everything. Work insurance typically has two downsides. First, you don’t control the amount of coverage, although sometimes you can opt to buy more but up to a pre-determined limit. Secondly, these types of policies are not transferrable so if you decide to change companies or if you are laid-off you lose your policy.
Private insurance is fully customizable and stays with you for as long as you need it.
Good question. There are a few instances where insurance companies have legitimate reasons not to pay your claim. If your policy term expires, if your policy lapses due to non payment, or if you terminate your policy you will not receive the death benefit. Additionally, there is a two year time frame where the insurance company can contest your claim for any evidence of fraud. In the event of that, they can either pay out only a portion of the face amount or depending on the situation, return the sum of your premium payments.
If you do not fall into either of these two categories then you can typically expect to receive your benefit.
The most affordable type of life insurance typically is term life if you require temporary coverage. We also have a range of permanent options that can be surprisingly affordable. Most clients have a mix of both that fit within their budgets.
Most of the time benefits are tax-free. This also includes living benefits.
Under certain circumstances, the proceeds can become a taxable event. Consult a tax attorney or an accountant for more information if you are unsure.
Everyone is in a different financial situation but life insurance can be an integral part of your financial library. Starting sooner rather than later can help you save more money on premiums. But, the next best time to buy is right now!
Ready to get Started?
Getting coverage is as easy as 1, 2, 3!
1
Find your policy
Selecting the type of policy that best fits your needs is a simple process and can typically be answered with one question: do you need temporary coverage or permanent coverage?
2
Compare Quotes
Let us do the heavy lifting for you. We can run quotes for all of our insurance companies at the same time so you can rest assured that we are finding the absolute best policy for you.
3
Apply
We'll be with you every step of the application process, whether that's in-person or using a digital app. We have a team that thoroughly scrubs each contract to make sure there are no surprises.
Quick Quote Request
Use the form below to submit a request for a quick life insurance quote.