Frequently Asked Questions

What is Life Insurance?

Life Insurance is protection against financial loss resulting from death. It is an insurance company’s promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.

Why do I need Life Insurance?

Although you may not think about it, your ability to earn an income is a significant asset and life insurance helps replace lost income in the event of your premature death. Here are some reasons why people buy life insurance.

Personal Uses

The death benefit may be used:

  • To replace income a family would need to maintain their standard of living after the death of a wage earner.
  • To pay off a mortgage loan and other personal and business debts.
  • To create a fund for children’s education.
  • To pay final expenses, such as funeral cost or medical bills.
  • To create a family emergency fund or a fund for a family member with special needs.

Business Uses

  • Key-Person – A life insurance policy can be used to protect a business from the loss of income and profits caused by the death of a key employee.
  • Business Loans – Life insurance protection on a key employee or business owner can be used to pay off the debts of a business in the event of that individual’s death.
  • Employee Benefits – Life insurance protection for employees is commonly included in company employee benefits plans.

There is no magic formula to determine how much life insurance you should have; however, there are a number of factors that should be considered when estimating how much life insurance you should carry. They include:

  • Final Expenses – These could be unpaid medical bills, funeral expenses, unpaid debts and taxes. Your insurance agent will take you through a series of steps called a Needs Analysis in determining your Sum Assured.
  • Re-adjustment Fund – This may be used to cushion the immediate lifestyle adjustment that a family must make when a loved one dies. The family may be forced to move, or the surviving spouse might have to look for a new job. In addition, a working spouse may find it difficult to return to work immediately after the death of a partner.
  • Supplemental Income – After the re-adjustment period, there should be a consistent income stream to help pay the family’s living expenses, such as mortgage payments, monthly bills, and daycare expenses.
  • Educational Funds – Adequate funds should be available for the children’s education. This might include private schools and University.
  • Retirement Fund – There should also be adequate funds available to ensure that the spouse can retire comfortably.

Protect yourself and your loved ones, call your sales representative or our office directly … on telephone numbers:……………and let us help you choose the right balance of insurance for your needs.