Life Insurance

If someone depends on you financially, you likely need life insurance. The proceeds of life insurance, known as the “death benefit,” can be used for any purpose. Life insurance beneficiaries can use the money to pay final expenses, replace lost income, pay off a mortgage or other debts, fund a child’s education and more. As a bonus, life insurance proceeds are not subject to federal income taxes in most instances.

There are three major types of non-variable life insurance coverage:

• Term life insurance–the most affordable type—is designed to pay a benefit if the insured person dies during a certain time period, such as 5, 10 or 20 years. Term life insurance is best when your need is limited to a set time period, such as the duration of your mortgage or until you retire. The coverage lasts only as long as the policy stipulates.
• Whole life insurance is permanent protection to cover you, literally, for your whole life. The coverage includes many guarantees. Premiums are guaranteed level and will never increase for the life of the contract as long as premiums are paid on time. Whole life insurance comes with guaranteed cash value, which accumulates over time and can be borrowed against.
• Universal life insurance is another permanent form of life insurance. Premiums are flexible, so you can choose to make higher payments when you can afford it or pay a lower amount if money is tight. Universal life insurance also has a cash value, which accumulates tax deferred. You can access your cash value in the future for any purpose.

Term life, whole life and universal life insurance plans have one sure thing in common: Each type pays a death benefit when the covered person passes away. The money can be used by heirs to replace income, pay off debts, leave a legacy, etc. But the three types can differ in terms of coverage length, premium flexibility, cash value accumulation and distribution, and other factors. To determine which type of life insurance is best for you, talk to your Bankers Life insurance agent, who will listen to your concerns, understand your needs and recommend the right solution for you.

Life insurance is an important component of any financial plan. As you consider how much life insurance you truly need, ask:

• How much income does my family need if I died today?
• What types of debts or other expenses need to be paid when I pass away?
  • These may include your mortgage, final expenses (such as funeral costs, probate charges, costs of settling your estate) and any other debt, such as credit card and car loan balances.
• How much do I have set aside for savings?
• Do I have any existing life insurance policies?

Upon the policyholder’s passing, the named beneficiary will receive the guaranteed death benefit (provided premiums are paid), which is a tax-free payment equal to the face amount of the policy, less any policy indebtedness.

Most life insurance claims are paid within 10 days of receiving a valid death certificate from the beneficiary.

Bankers Life’s permanent life insurance policies offer living benefits, which build cash value that you can access through loans and withdrawals. The cash can then be used however you’d like–add to your retirement income, pay off debts, or cover emergency expenses.

Yes. There are two approaches to naming multiple beneficiaries – either the per capita or per stirpes option:

• The per capita approach divides the benefit among all named beneficiaries. If a beneficiary is deceased, a share won’t be created for that person, and shares of other members will be increased accordingly.
• The per stirpes approach differs in the case of a deceased beneficiary, where their distribution would be divided up evenly among the deceased’s descendants.