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Life Insurance is a financial tool that helps protect against the risk that a person be unable to fulfill obligations to loved ones if they die prematurely. A life insurance policy guarantees that a designated amount of money will be available, generally income-tax-free, at the very time it is needed most, at death, when survivors may be exposed to certain financial risks, such as burial expenses, loss of personal or business income and debts. Death benefit proceeds from life insurance can create instant capital that can be used to help solve personal and business problems.
How Can Life Insurance Be Used?
To make up for lack of liquidity at insured's death: Not enough cash to pay taxes, administrative costs, attorney's fees, appraisal fees, and other expenses incurred at death.
Help pay for your children's education.
To reduce the cost of transferring wealth from one generation to another.
To leave cash to help create financial security for an organization such as: schools, churches, synagogyes, communities, or other charitable organizations.
What Is the Right Type of Life Insurance for Me?
There are many kinds of life insurance, but they generally fall into two categories: term insurance and permanent insurance.
Term insurance is designed to meet temporary needs. It provides death benefit protection for a specific period of time (the "term") and generally pays a benefit only if you die during the term. This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.
Permanent insurance provides lifelong death benefit protection. As long as you pay the premiums when due, and no loans, withdrawals, or surrenders are taken, the full face amount will be paid. Because it is designed to last a lifetime, permanent life insurance accumulates cash value and is priced for you to keep over a long period of time.
Term or Permanent? Which is right for you? Try ourInteractive Decision Guide
Provided by the Life and Health Insurance Foundation for Education.
How Much Life Insurance Do I Need?
Our life insurance calculator allows you to perform "hypotheticals," recalculating and generating new results as you input differently and make new assumptions. Using the calculator and educating yourself on the workings of life insurance can help you feel more comfortable when discussing your needs with your New York Life agent.
Life Insurance FAQs:
Understand the specifics of life insurance, like underwriting, dividends, and optional riders, to name a few: Life Insurance FAQs
Test your life insurance knowledge by taking our Life Insurance Quiz!
How Do I Get Life Insurance?
Most people buy life insurance through insurance agents or other financial professionals, and for good reasons. Determining how much and what kind of insurance to buy is one of the most important financial decisions you'll ever make, but it's also one of the most complicated. A qualified agent will conduct a complete financial needs analysis, and walk you through the multitude of questions you need to consider to determine how much and what kind of insurance is right for you.
Of course, the quality of advice you get is dependent on how good your agent is. You'll obviously want to work with someone who has the right licensing, training, and experience. But don't underestimate the importance of finding someone who's a good listener. A good agent will take the time to understand your objectives, help you construct a financial game plan, and then work with you to find the right insurance products for your specific situation.
Request a no obligation review with a New York Life agent. Consult a New York Life Bay Area Agent
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