FAQ

Intro to Life Insurance

Life insurance is always perceived as a healthy backup. However, if you have only recently learned about life insurance, then due to insufficient knowledge, you might find it to be puzzling and complicated. Keep calm and let us enlighten you with the fundamentals of life insurance so that you may feel confident about becoming insured.

Life Insurance: What is it really?

“It is cheaper to buy 10 years early than one minute too late.”

In a nutshell, life insurance is the smartest shortcut towards providing financial security for those dearest to you. Life insurance grants the insured, the Death Benefit— promising a generous pay-out if the person insured meets his/her demise. Thereby, guaranteeing the financial stability of your loved ones even in your absence. That right there is the significance of obtaining life insurance. EDGAR Insurance Agency makes the procedure into two folds easier.

The default policy of any life insurance is composed of these four elements:

Is the individual who activates life insurance in his/her name and gets granted all the benefits of the policy.

Are the people to whom the Death Benefit is given if the Insured has passed away. Beneficiary/beneficiaries are to be selected by the Insured when purchasing a policy.

This is the payment that keeps your life insurance active. Completing the payment of the premium makes sure that the Insurance company delivers the Death Benefit to the beneficiaries. In an event where the payment of the premiums is not being paid, it will lead to the termination of the policy.

A sum of money given to the beneficiaries who were chosen by the Insured at the time of buying the policy. This money is not answerable to income tax and is paid out in the form of lump-sum payment if the insured dies.

Table of Contents

Unsure about Your Coverage Needs?

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I want Life Insurance but am Unfamiliar with its Types

Also known as Whole Life Insurance. If you are thinking long-term and the level of protection you seek, also stretches to a lifetime, then permanent life insurance is your most efficient bet. Yes, it weighs heavily on your wallet but if it falls under the budget, the value matches the benefits earned.

Wait there’s more.

  • Many types of permanent life insurance come with cash accumulation as the policy’s premiums are paid. This means that the cash value grows with a confirmed minimum rate of return.
  • Most of the time, the insured person can borrow against the cash value that is accumulated in the policy. He/she can also withdraw the cash value or leave it in the policy to increase or maintain the Death benefit.
  • Premiums for permanent life insurance tend to be more expensive compared to term life insurance due to the bigger duration of the coverage as well as due to the cash value accumulation possibilities.

 

Permanent Life Insurance

Also known as Whole Life Insurance. If you are thinking long-term and the level of protection you seek, also stretches to a lifetime, then permanent life insurance is your most efficient bet. Yes, it weighs heavily on your wallet but if it falls under the budget, the value matches the benefits earned.

Wait there’s more.

  • Many types of permanent life insurance come with cash accumulation as the policy’s premiums are paid. This means that the cash value grows with a confirmed minimum rate of return.
  • Most of the time, the insured person can borrow against the cash value that is accumulated in the policy. He/she can also withdraw the cash value or leave it in the policy to increase or maintain the Death benefit.
  • Premiums for permanent life insurance tend to be more expensive compared to term life insurance due to the bigger duration of the coverage as well as due to the cash value accumulation possibilities.

Term Life Insurance

The meaning always lies in the name itself. Term life insurance is for those who seek life insurance for a specific time. Thereby, it is not permanent and is cheaper compared to life insurance. Also, it is important to note that, unlike Permanent life insurance, Term life insurance does not have the perk of cash value accumulation attached to it. Yes, the Death Benefit is a part of Term life insurance but only if the tragedy occurs during the decided term of the insurance. Many people go forth with Term life insurance because it weighs lightly on the wallet and feels less hectic in contrast to Permanent life insurance.

Moving onto the other details.

  • When choosing Term life insurance, you are given the complete freedom of choosing the duration of your term as well as the amount of coverage that would be paid out to the beneficiaries in the form of a Death benefit
  • If the duration of the term comes to an end, you’ll have to renew the policy
  • For many, Term life insurance is less daunting as compared to Permanent life insurance due to its cheaper premiums; thus, making it an affordable alternative.

Whole vs Term Insurance

What are the distinct features of the two? Let’s enlighten ourselves with these two options of insurance in order to eliminate any unthoughtful or impetuous decision. Learn more about Term Life Insurance and Whole Life Insurance here. 

Employer-sponsored (Group) Life Insurance

There is a correlation between Group life insurance and an Employer-sponsored life insurance policy. There is a chance that you already receive coverage to some extent via the employee benefit but keep in mind that such a policy grants you only a fragment of the coverage you desire. It is due to this unfavourable aspect of group life insurance that people side with Individual Term life Insurance policy instead— enhancing the coverage they gain through their respective careers.

Receive Fast Estimate

The obsolete (you can use the word outdated too) method of paper is too time stretching. EDGAR has compressed the process to save you time, difficulty and cash.

How much coverage do I need?

The amount of coverage you need heavily depends on your financial stability, your mindset (short-term coverage or long-term coverage) and other personal circumstances. You can with ease calculate your ideal coverage via our online calculator. Simply calculate your long-term financial commitments and subtract your assets. The remainder of the value is what the life insurance needs to fill. EDGAR’s Life Insurance Calculator facilitates you in determining your coverage requirements.

How much does life insurance cost?

The final amount of life insurance varies from person to person. The amount of your premium is affected by several factors. For example:

  • The Policy- Is it Term or Whole life insurance? Whole life policies are more costly because their duration is the entirety of a person’s lifespan. Not to mention, it comes with the accumulation of cash value
  • Simplified and Full Underwriting- Simplified underwriting policies are more convenient compared to full underwriting because they come with the exemption of medical exams.
  • Age- Young people benefit at lower rates. Vice versa for the elderly.
  • Health Status- A person with a lot of health issues might have to pay more
  • Use of tobacco- Many companies favour non-smokers and offer lower rates to them