Life Insurance Basics

Although life insurance can feel like a morbid topic, we at Manteca Insurance & Financial Services in Central Valley CA know that ignoring it can cause great harm to our loved ones. To help get you started, here is a quick rundown of life insurance basics.

Life Insurance Key Terms

Life insurance is a type of insurance policy that pays cash to someone when the named person on the policy dies. The beneficiary is the person who receives the death benefits, or cash payout. The two main categories of insurance are term life insurance and whole life insurance.

Term Life Insurance

This type of insurance lasts for a set period of time and provides a payout if death occurs during that time. Its benefits are clear and straightforward, and it costs much less than whole life insurance. The downside of term life insurance compared to whole life insurance will become more apparent in the next section.

Whole Life Insurance

With whole life insurance, the policy has no end date. As long as you keep paying your premium, the provider typically has to keep honoring the policy at that rate. Most whole life policies will also build an actual cash value based on a portion of your premiums. You’ll receive that amount if the policy is ended, and you may have more options like allowing the provider to invest the value of your policy in a fund that gains interest. Some policies even increase the payout value as your policy increases in age.

The only downsides to whole life insurance are the higher premiums and stricter screening by the providers.

Learn More about Life Insurance

While this basic primer can help, even the most basic insurance questions will have answers that change based on your situation. Manteca Insurance & Financial Services in Central Valley, CA will gladly assist you with learning more about your life insurance options.

Two income families and life insurance

Life insurance is designed to give you peace of mind and to protect those you will leave behind when you pass away. Some types of life insurance provide other benefits besides the death benefit, but the death benefit is what most people are interested in, When you are ready to discuss what your needs for life insurance are, we are here to talk. At Manteca Insurance & Financial Services in Central Valley, CA, we have been helping clients for seventy years. We represent them and offer some top carriers in the business. 

When a family has two incomes, the need for life insurance is different from a one-income family. Both parties need to have their incomes replaced in the event of their death. The days of the stay-at-home spouse are if not quite gone at least much less common. Many families require two incomes to maintain their lifestyle. If one part of a dual-income family passes away, it might prove to be very difficult for the other party to continue as in the past. 

You may not like to think about the possibility of dying or even worse, losing your partner, but the reality is about 5% of children in the United States lose a parent before age 15 and 70% of families will have to file for bankruptcy after losing the breadwinner. Even with two breadwinners, the possibility exists of having to change homes, schools, and lifestyles making death even harder to bear. 

Both partners in a two-income family need to have life insurance and coming up with an affordable way to protect your family may require the help of an insurance agent. In Central Valley, CA contact Manteca Insurance & Financial Services to discuss the life insurance options that are best for your two-income family.

How much life insurance do I need

Life insurance is a way to provide a safety net for the people who love and depend on you. It can make all the difference in what will already be a challenging time. You might even say this is your final gift to your loved ones. How much life insurance you need is something very individual, and having an insurance agent you know, and trust helps. When you are looking for an independent insurance agent, you can trust our team at Manteca Insurance & Financial Services in Central Valley, CA is here for you. 

When determining how much life insurance you need, many things factor in. Age, marital status, dependents, and financial situation. Life is risky, and you need to consider your risk level.  

Age

The fact is, life insurance is less expensive when you are young and healthy. You may get life insurance through your employer. If you have no dependent or financial responsibilities such as a mortgage, this may be adequate. But if you have trouble saving, a whole life policy purchased at this age makes sense. 

Marital status

If you are married, you have more than just yourself to consider. You need to assess your spouse’s situation if you were no longer there with your paycheck. Would they be able to maintain their current lifestyle?  

Dependents

If you have children or dependent relatives, you have something else to consider. How many years would they need to be maintained?  How much of their maintenance would life insurance have to provide? 

Financial situation

If even your final expenses would be impossible for those you leave behind to pay, you need to have enough life insurance to make sure this is covered. 

At Manteca Insurance & Financial Services in Central Valley, CA, we want to sit down with you to determine how much life insurance you need and can afford. Contact us to set up an appointment.