Your Term Life Insurance Questions Answered

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Your Term Life Insurance Questions Answered

havenlife.com

Your Term Life Insurance Questions Answered

Life insurance can be difficult to understand. There are numerous options available and the best choice for you and your loved ones isn’t always so clear. We get it and can commiserate with you. Many members of our team went through the researching and buying process long before Haven Life came along. We want to help you navigate the process and make an informed, confident decision. Below are some of the most common questions we get and our candid answers.

How are we different? Haven Life is about bringing life insurance to the digital age. This means we provide a plain-language, zero commission policy that’s easy, affordable and available to purchase entirely online. How can we do that? Well, because we’re a technology focused company and not a team of agents. As a digital agency, we’re able to build our own innovative, first-oftheir-kind products that uncomplicate a typically complicated process. Oh, and don’t worry – if you have questions we’ll be here, in person, to help. In fact, our customer service department is second to none (seriously, they’re lovely) and available by phone, email, and chat to assist.

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Why is term life insurance often the best value? Term life insurance is a great value for most people because it provides you with the coverage you need, when you really need it. With term life insurance, you pick a term length and coverage amount that you need and, once approved, you pay your monthly premium and you’re covered. Once the term ends, coverage may continue, but at higher premiums. Term life insurance is also very affordable; often much less than your cable bill per month. A 20-year, $500,000 Haven Term policy for a 30-year old woman in excellent health would cost $17.25 a month

How much life insurance do I need? The question you need to ask your advisor is ‘How much money will my loved ones need when I’m gone?’ Maybe it’s just your partner or maybe it’s your partner and kids. Could they afford the mortgage? Pay for college? Or even keep the lights on? Your advisor can help you determine what the right amount might be based on your individual situation. Haven Life has a very simple, free life insurance calculator that you and your advisor can use as a starting point.

Is life insurance necessary for a single person? Life insurance often isn’t necessary for an unmarried and childless person. But there are some circumstances when, if single, you should still consider purchasing a policy, as financial dependents span more than just your partner or children. If you have significant cosigned debt, such as student loans or a mortgage that would fall to your parents or loved ones if you died, then you may want to consider term life insurance to cover those debts. Additionally, if you are single and the primary caretaker of an elderly person, then you should consider how much it would cost to care for them if you died. Your advisor can help you think through these scenarios and help you determine how much, if any, coverage is appropriate for your situation. 3

Does term life insurance cost more every year? In most cases, term life insurance policies don’t go up in cost every year provided you purchase a “level premium” policy. This means the premium remains the same for the duration of the policy term length, regardless of your age or health. A level premium also reduces the risk that you won’t be able to afford the policy a few years down the road.

Does term life insurance expire? Yes, term life insurance expires at the end of your designated policy term length – typically 10,15, 20 or 30 years – or if you’ve failed to pay your premiums. It’s important to make sure your policy features guaranteed renewability, which most top insurers offer in some of their policies. Guaranteed renewability ensures that you can still get covered after the policy term length lapses. However, it’ll likely be significantly more expensive as you’ll be older and potentially less healthy than you were when you bought the policy.

Is life insurance taxable to the beneficiary? A life insurance death benefit is usually not taxable to the beneficiary. However, from the date the policyholder dies, whether a beneficiary has notified their insurance carrier or not, the death benefit starts to accrue interest because the insurer is holding on to it and must pay interest just like your bank would. You get taxed on the difference in accrued interest. The rate for a death benefit issued is typically 3 percent annually. So, if the death benefit goes unreleased for a year on that $500,000 policy, you will accrue $15,000 in interest, which would be taxable. If it went 30 days, you would receive $1,250. 4

Can I trust my life insurance company to pay my beneficiaries? One important question to consider when purchasing your life insurance is “Is my insurance provider financially strong enough to pay my death benefit should the need arise?” A little research can go a long way in providing peace of mind that your insurer will honor their commitment. A.M. Best has been providing ratings for life insurers since 1899 and uses criteria such as a company’s balance sheet strength and past performance to rate a company anywhere from A++, which is considered superior, to D. Haven Life policies are issued by MassMutual which is rated A++ by AM Best.

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Haven Term is a Term Life Insurance Policy (DTC, ICC14DTC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111 and offered exclusively through Haven Life Insurance Agency, LLC MassMutual and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company are rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of November 1, 2016 and is subject to change. MassMutual has received other ratings from different rating agencies. Important information about AM Best’s Financial ratings.