Many Americans would face financial hardship if an employee died unexpectedly. Life Insurance Awareness Month – celebrated in September each year – is a reminder that life insurance can help protect your loved ones financially now and in the future.
The State Corporation Commission Bureau of Insurance reminds Virginians that there are many factors to consider when determining if life insurance is right for you and your family.
“When considering your family’s financial future, take a look at your existing financial resources, debts and other liabilities, and your family’s needs and goals,” Virginia Insurance Commissioner Scott White said. “Understand the different types of life insurance and shop around to compare prices and coverage. “
White encourages Virginians who already have life insurance to regularly review their policies and update their policies and beneficiaries so that their coverage adapts to their changing circumstances. Life events such as birth, divorce, remarriage, or other changes affecting your finances (such as a new mortgage or a new job) may require an update to your life insurance policy.
If you don’t have life insurance, shop around and understand the different types of policies available and the costs.
“Think about your family situation if you die tomorrow,” White said. Review your existing resources and consider the following: Does your spouse work? Do you have other sources of income than wages? Do you have life insurance as part of your work?
Also consider financial obligations that may fall on family members if you die, such as a mortgage, business expenses, medical bills, car loans, or student loans. Also consider short- and long-term goals such as retiring your spouse, supporting a loved one, or raising your children.
White encourages Virginians to understand the types of life insurance available – term or permanent life – and how benefits are paid when you die. Term life insurance provides protection against death for a specified period. Benefits are only paid if the policyholder dies during the term of the policy. Term policies generally have lower premiums, but premiums can increase with age or at the end of a specific “term”. Term policies do not create a cash value, but some permanent life insurance policies such as whole life, adjustable / universal life insurance, or variable life insurance create a cash surrender value. over time. Permanent policies cover the insured for life as long as premiums are paid when due.
Life insurance can do more than protect your spouse and your dependents after you die. Some policies contain guarantees that can be used during your lifetime. For example, a policyholder might be able to use the cash value accumulated in a permanent life insurance policy to pay for expenses related to education, retirement or emergencies.
What you pay for life insurance largely depends on the type of policy you choose, your health, age, gender, profession, family history, and lifestyle. The following factors may affect your ability to obtain life insurance coverage or the premium you have to pay: pre-existing conditions and chronic health problems such as diabetes, heart disease or cancer; bad health habits such as smoking or drinking; your driving record and if you engage in activities considered risky by the insurer, such as rock climbing, motorcycling, parachuting, horseback riding or skiing.
Compare premiums, coverage, and claims service when considering life insurance options. Contact the Richmond Bureau of Insurance at 804-371-9741 or toll free at 1-877-310-6560 with any questions or to ensure the company or person providing coverage is authorized and in good standing. The Bureau has a free Virginia Life Insurance Consumer Guide with answers to many questions about life insurance on its website at scc.virginia.gov/pages/Tips,-Guides-Publications .
The National Association of Insurance Commissioners offers a free life insurance policy locator service that can help consumers find lost life insurance policies and annuity contracts. From January 2017 to June 2021, the tracking service matched 4,616 policies for Virginians with a total face value of $ 117,052,464. Nationally, from November 2016 to June 2021, there were 147,140 policies with a total face value of $ 3,775,837,551.
To learn more about the location service, visit eapps.naic.org/life-policy-locator/#/welcome.