Selecting the right Massachusetts Life Insurance policy to protect your loved ones can be a confusing and overwhelming task. That's why InsureMe is here to answer your questions and put you in touch with up to five Massachusetts life insurance agents who are eager to compete for your business and get you the best deal for your buck.
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What is life insurance?
Life insurance policies are sold by insurance companies to help meet the financial needs of your loved ones in the event of your death.
Why should I purchase life insurance?
A Massachusetts life insurance policy can help protect your family in the event of your death by providing a supplemental income to pay for bills, taxes, and other necessities.
How do I know if I need a life insurance policy?
It is important to note that your need for life insurance can change over a lifetime. Consider the following:
How much life insurance do I need?
Unfortunately, there is no clear-cut formula to tell you how much coverage you need. The Massachusetts State Department of Insurance reports that most consumer groups recommend up to five times your gross annual income, while some organizations recommend buying up to ten times your annual gross income. Under these recommendations, a family with a gross income of $40,000 might want to take out anywhere from $200,000 to $400,000. Experts also recommend assessing your needs by addressing the following:
Don't forget about any additional assets such as cash, savings, Social Security and pension.
What kind of life insurance should I buy?
It is important to understand that not all Massachusetts life insurance policies are created equal. There are four basic types of life insurance: Term, Whole, Universal and Variable.
Term Life Insurance
Massachusetts term life insurance is the most common type of life insurance and is generally cheaper and easier to understand. It provides a check to your beneficiary after your passing. Term life insurance usually offers you the best value for your dollar by giving the biggest death benefit for your premium amount.
It is important to note that term life insurance covers you for a period of one or more years. It pays a death benefit only if you die during that term.
Be advised that each time you renew your term life policy your premiums may be higher because you will be older. To avoid surprises, you may want to ask your insurance company to show you the projected premiums for the next 10 or 20 years.
Whole Life Insurance
Massachusetts whole life insurance is also known as permanent insurance,. A whole life policy covers you as long as you live — as long as you pay the premiums.
In order to buy whole life insurance, you will need to fill out a health questionnaire and possibly undergo a medical examination. After you have received your whole life policy, you will generally pay the same amount for premiums for as long as you live. While the premium is based on your age and health at the time of purchase, you may see instances where the premium will change over time — be sure you understand what your premium payments will be and make sure you can afford them!
Unlike a term life policy, whole life insurance may also earn dividends on a yearly basis. If you do not take out the dividends when they accrue, they too will earn interest.
Universal Life Insurance
Massachusetts universal life insurance lets you vary your premium payments and when you make payments, with some limitations. For instance, you may be able to increase or decrease your payments as long as the total amount of premium payments is enough to keep the policy in tact.
Like the whole life policy, a universal life policy has the potential to earn cash value, most of which depends on the performance of investments made by the insurance company — make sure you understand whether any benefits or cash values are guaranteed.
Variable Life Insurance
Massachusetts variable life insurance varies based on the performance of the assets in which your premium is invested. Your insurance agent will generally provide you with an assortment of investment options (equity, bond and money market mutual funds) to choose from. It is important to understand that your death benefits and cash values are directly linked to the performance of your investment option! (Your insurance company may have a guaranteed minimum death benefit, but you are likely to pay extra for that feature.)
At this point, it may be evident that a variable life insurance policy warrants no guarantees. Thus, if the investments you select lose money, you may find that the value of your account is much less than what you had originally put into it.
What if I still have questions?
To speak to an agent who can help you and give you an accurate insurance quote all you need to do is fill out our fast and easy quote form. Also, the Massachusetts Division of Insurance has a wealth of information for consumers. You can call the Consumer Information Hotline at (617) 521-7794 or visit them at http://www.mass.gov/doi/home.html.
Don't wait for the inevitable. Let InsureMe help you find the most affordable Massachusetts life insurance policy today.