Providing Answers to Life Insurance Questions
Life is full of change. That's why life insurance is important to keep you and your family protected. Get answers to some of the more common questions about life insurance. If you still need help, your Farm Bureau Insurance agent will be happy to discuss your particular situation with you and get you the answers you need.
Frequently Asked Questions
Life insurance is intended to provide financial security for individuals or entities that are dependent on someone else's continued ability to provide income. Most people buy life insurance to replace lost income, but it can also be used as collateral for a debt, provide needed income to carry on a family business, pay final expenses, and protect the transfer of your estate to others by providing funds needed to pay taxes.
There are two basic types of life insurance:
- Temporary insurance (Term Life) provides life insurance protection for a specified duration of time ranging from one year to even decades. It can offer lower premiums, but you are only protected for a limited number of years.
- Permanent insurance is intended to last for a lifetime, regardless of when death occurs. This insurance can come in the form of Whole Life or Universal Life, and will cover the insured for their entire life then pays a death benefit to beneficiaries whenever the insured dies.
Life insurance amounts will depend on your specific situation (annual income, debts, family, etc.). Contact a Farm Bureau Insurance agent who will help determine the coverage amount you need within your budget.
That will depend on the type of policy you select:
- Term insurance has the benefit of level premiums for a specific length of time – 10, 20, or 30 years.
- Whole life insurance premiums will remain the same through age 100.
- Universal Life insurance has flexible premiums, but paying less in the early years of the policy could mean you will need to pay more in later years.
As an insurance policy owner, you select the person or organization that you want to receive the benefits payable from your policy when the insured dies. Selecting the beneficiary is the most important right that you have.
Review your beneficiary decisions at least once a year. Make sure that your beneficiary designation fits the needs of your current plan and your beneficiary is eligible to receive the payments (e.g., children who are minors).
Contact your agent for more information on beneficiaries or if you need to change them.
Review your life insurance policy after any big life events or milestones to help identify changes in your insurance needs. Consider making changes to your policy if you have recently:
- Gotten married or divorced
- Had or adopted a child
- Purchase a new home
- Taken on new debt
- Had a job change
- Had changes in your business
- Started planning for your children to attend college
- Started planning for your own retirement
Contact your agent to discuss any recent life changes to ensure you have the necessary coverage.