Life Insurance

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Life Insurance Basics

Life insurance is something everyone needs but few people really want to discuss in detail. However, taking out a life insurance policy is as practical as taking out a home or automobile insurance policy. Here’s what you need to know about life insurance and how to get help purchasing life insurance coverage that serves your family’s unique needs.

Who Needs to Purchase Life Insurance?

Life insurance coverage is a smart purchase for anyone, including:

  • Individuals who have debt that they don’t want their loved ones to have to pay after they pass
  • Parents and grandparents who want to ensure their children and grandchildren are provided for after their death
  • Individuals who want to purchase an insurance policy while they are young to secure a lower premium
  • Spouses who do not work and will need income supplementation if their spouse should pass
  • Spouses who work and will need funds to pay for childcare and/or time off work should their spouse pass
  • Individuals who want to replace their previous employer’s provided policy
  • Entrepreneurs who want to provide funds for their businesses to continue operations after their death

How Does Life Insurance Work?

Life insurance works the way most other insurances do – the covered individual makes monthly or yearly payments and if a covered event occurs, the insurance company pays out the agreed upon amount to the covered individual. In the case of life insurance, the covered event is the loss of that life and the payout goes to individuals named in the policy, usually a spouse, children, or other next-of-kin.

The sum of money can be used to cover funeral expenses, replace lost wages (both for the deceased and for grieving spouses and children who take time off work), pay medical expenses, pay remaining debt in the deceased’s name, pay off a mortgage, and provide for daily expenses of a family after suffering the loss of a loved one.

Life insurance is a practical way to ensure that your loved ones are financially provided for after your passing and to prevent your loved ones from incurring your existing debt or medical and funeral expenses.

How Much Life Insurance Do You Need?

Calculating how much life insurance you need can be a complicated process. First, you’ll need to add together any large sums that you want your life insurance to pay for, such as your funeral, mortgage, other debt, a new vehicle, money for savings, etc.

Then, calculate your average yearly expenses, from your mortgage to your grocery bill. Multiply that by the number of years you want to provide for your family. Account for inflation as best you can. Alternatively, you can calculate your average yearly income, accounting for raises, bonuses, and career growth as best you can. Then, multiply that figure by the number of years you want to provide for your family.

Is Life Insurance Affordable?

How much coverage you have directly influences how much your policy premiums cost. Other factors that affect how much your policy costs are your physical and mental health, your job and hobbies, and other things that may have an impact on the length of your life.

Life insurance can be extremely affordable when you’re young and healthy, and many cost-effective policies are still available for older individuals or those with health concerns. It’s important to discuss your coverage versus your premiums with an experienced Southwest Florida life insurance agency. You may need to do some adjustment to your ideal life insurance policy to make it affordable for you, or you may realize that you can afford more life insurance than you originally thought.

What Is Term Life Insurance?

Term life insurance pays your beneficiaries the agreed upon amount in your policy if you pass within a set amount of time, or a “term.” Terms are typically 10, 15, 20, or 30 years. The shorter the term, the less expensive the policy premiums will be.

Often, individuals purchase term life insurance when they are young and switch to permanent life insurance later when they have more income stability. At the Culbertson Agency, we have several term policies that allow individuals to convert to a permanent policy without having to undergo a second medical evaluation.

What Is Permanent Life Insurance?

A permanent life insurance policy lasts the duration of your entire life and pays your beneficiaries the agreed upon amount specified in your policy upon your death, whenever that may be. The total cost of a permanent life insurance policy is more than a term policy, but you are also accruing cash value in your policy. In some cases, you may even be able to borrow against your life insurance policy by using it as collateral.

Can You Have Multiple Life Insurance Policies?

It’s legal to have more than one life insurance policy and if your passing meets the criteria of each (such as occurring within a term), all your policies will make payment to your beneficiaries.

In fact, it’s often recommended to take out multiple policies if you need more coverage and want to keep your premiums as low as possible. Be aware that you likely don’t want to apply for more than one policy at a time because it slows down the application process, or it could result in a denial for coverage because it appears as though you’re attempting to apply for twice the coverage that you need for your income and assets.

Instead, many people stack life insurance policies. Instead of increasing the limit on their existing life insurance policy when they have a significant life change like having a baby or taking out a new mortgage, they simply purchase a second policy.

Call the Culbertson Agency Today

The Culbertson Agency provides residents of Southwest Florida with comprehensive life insurance coverage to help protect your loved ones in the event of the worst-case scenario. Contact us today for more information about how to get a life insurance policy tailored to your specific needs at (239) 210-7710 (Naples) or (239)-210-7700 (Fort Myers). Serving the Fort Myers, Naples, Cape Coral, and Marco Island areas.

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What Our Clients Are Saying


From the time I called the agency to file a claim for roof damage from hurricane Irma I received outstanding service and concern from David. He called weekly to insure that the claim process was moving forward and would call the insurance company if there were delays in the process. He is a true professional and an asset to the agency. Thank you!

Russell

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