From D.O.K. Insurance Agency
About Life Insurance
Just like with so many other types of insurance, a consumer has a lot of options when it comes to life insurance. Contrary to an auto or home policy, the first decision a client needs to make is which type of policy is right for them. At the DOK Insurance Agency, we have licensed staff that can help to walk you through the decision process. Once a decision is made, we look at over 25 different companies that each may sell different types of products and resulting in a number of choices that are in the hundreds. Therefore, we want to make sure that you understand your needs and choices and then help you find the best solution.
The first step is to understand what main life insurance options there are and which of those options fits your needs best. The table below gives you a basic breakdown of the different options that are available.
Term (Fully Underwritten)
Term (Guaranteed Issue)
Term (Annual Renewable)
|Coverage Amount||$100,000 & Up||$25,000 - $350,000||$100,000 & Up|
|Coverage Length||From 1 year to 30 Years||From 1 year to 30 Years||1 year|
|Age Eligibility||18 – 80 Years||18 – 75 Years||18-80 Years|
|Premiums||Lowest for clients with excellent to average health||Usually higher than fully underwritten term||Lowest of term products but may increase each year|
|Medical History||Most require a medical exam||Health questions only||Most require a medical exam|
|Who It’s For||The higher face value and lower premium make it an excellent choice for most individuals who know they have people who depend on their income.||Since no medical exam is required, this type of policy is usually for those who don’t want to take the exam or feel that their health my not be as optimal.||For those with short-term life insurance needs, such collateral for a business loan as a key person.|
Whole Life (Fully Underwritten)
Universal Life (Generally Indexed)
|Coverage Amount||$5,000 - $50,000||$10,000 & Up||$25,000 & Up|
|Coverage Length||For Life||For Life||For Life (if funded correctly)|
|Premiums||Lowest Permanent Life Policy due to lower face amounts and waiting period||Guaranteed premium for life with guaranteed payout||Flexible premiums. Minimum premiums levels should be avoided over long periods of time.|
|Medical History||Some companies will ask a few health questions, others do not.||Medical exam required for higher face amounts and/or higher age||Most require a medical exam|
|Who It’s For||This policy is generally purchased by someone who is only looking for a small guaranteed death benefit. This may also be the only option for someone who faces a major illness such as cancer or heart disease.||There are usually two different types of buyers for a whole life policy. One is someone that wants a guaranteed death benefit while being able to cash out the policy. Another is someone looking for tax free withdrawals in retirement.||Due to its premium flexibility and indexed growth, an IUL purchased by someone looking for a tax-free income in retirement while having some flexibility in the premium payments.|
How Much Life Insurance Do I Need?
Domain specific script goes here!
Do You Or a Loved One Have Special Life Insurance Needs?
Frequently Asked Questions
Does the financial strength of a life insurance company matter?It depends. In our opinion, a company’s track record (history) and financial strength matter when it comes to whole and universal life policies. Since a company’s ability and – quite frankly – willingness to provide a desirable growth on the cash value for the life of the policy, we want to take a close look at their portfolio. Term and Final Expense policies are very straight forward and leave essentially no risk to the consumer that, for example, the company cannot pay out the benefit or tries to avoid paying a claim. Life insurance is a very strictly regulated insurance product that protects the consumer very well.
Can a life insurance claim be denied?Yes, but under only a handful of circumstances. If a client passes away during the first two years of a life insurance policy, the insurance company has the right to review the claim. The company would want to make sure that the applicant didn’t lie, for example, about a cancer diagnosis right before applying for the policy. This two-year timeframe, which is also called period of contestability, ensures that applicants cannot simply apply for a life insurance policy right after they have been diagnosed with a (terminal) illness or are planning on committing suicide. However, once the contestability period expires, the life insurance company must pay out a death benefit, no matter the cause of death (including suicide) or if the client lied on the application.
What is the point of life insurance for babies and children?You have probably seen commercials from a well-known baby food producer about buying a life insurance policy for a baby. The main point is that the policy will accumulate cash and that cash value can be used for the child’s college, wedding, down-payment on a house or whatever else you desire. It is a very good idea to compare these types of policies to college savings plans since life insurance policies have no restrictions as to what the cash value can be used for. More importantly, the right policy may also provide a larger benefit than other saving plans.
Benefits Of Child Life Insurance
Locking In A Low Rate
Due to the child’s age, the rate charged for the policy is as low as they can get during their lifetime. Qualifying for life insurance isn’t a guarantee, especially to qualify with the best available rate.
With an in-force policy, as long as the premium payment is made, no health issue or other life event will negatively impact the policy. There are also options for a one-time single pay premium that allows for the fastest cash value growth without needing to make another payment during the life of the child.
As long as you continue to make the required premium payments, the cash value in your child’s policy has the potential to grow over time. You can also pay off a policy to take advantage of fast cash value growth without making premium payments in the future.