Life Insurance 101: The Basics of What it is and How to get it

What Is Life Insurance 101?

Basic Life Insurance is a contract between an insurer and a policyholder. After the insured dies the insurance company guarantees payment of a death benefit to your beneficiaries. The insurance company promises a death benefit to your loved ones in exchange for premiums paid by you. You choose who will be your beneficiary. Let’s say it is your daughter, son, or spouse. It can even be a trust or an estate.

Who Is a Primary Beneficiary?

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A primary beneficiary is a person who is first in line to receive benefits in a will, trust, retirement account, life insurance policy, or annuity upon the account holder’s death. You can name multiple primary beneficiaries and stipulate how distributions would be allocated.

Your beneficiary is going to receive an X amount of dollars, let’s say $5,000 to $40,000 depending upon the type of life insurance plan you choose.

Typically past the age of about 50, you want to start choosing a Whole Life Insurance policy.

What Is Whole Life Insurance?


Whole life insurance provides coverage until the insured dies.  These types of whole life policies can accumulate a savings fund. This is in addition to providing a death benefit. These types of policies are also known as permanent or traditional life insurance. Your beneficiary will not only receive your death benefit but also the additional monies. The best news is that there are no tax consequences to your beneficiaries.  The money is absolutely tax-free.! It’s a wonderful financial gift to give to your loved ones. The proceeds are dispersed right away after your death. So it can take care of things like your burial costs or final expenses.

What are your Final Expenses?

Insurance policies that leave an excess of funds to take care of your final expenses are another great blessing for your loved ones. The whole life policy can cover your burial, cremation,  funeral costs, travel expenses and miscellaneous bills upon your death. It tends to be the most economical way to take care of those costs.

What is Burial Insurance?

best burial insurance

Some whole life policies are generally set up with the intention of being affordable for seniors that are on a fixed income. They are most commonly referred to as Burial Insurance. Insurance companies market this type of policy to seniors as a final expense or burial insurance to invoke an urgent need to cover their funeral expenses and unpaid bills. It is a normal life insurance policy with a small death benefit that your loved ones can use for any purpose. Typically, you are not required to take a medical exam but those looking for more affordable premiums s are required to answer a medical questionnaire and not be diagnosed with a terminal illness.

What is the Best Way to Get a Life Insurance Policy?

It’s important to actually get in touch with a reputable life insurance agency like Protect With Insurance. We’re headquartered out of Arizona, but we serve most of the United States. So we’re able to pull competitive pricing by shopping policies and rates for you all over the country.

One of the best ways to begin is by learning the lingo of life insurance. You can do this by going through the blogs on this site or speak directly to a Protect With Insurance agent who can easily walk you through the various definitions. Next, you need to decide how much life insurance you need or want to take out. Of course, your premiums pay a big factor in this. You can use the quote box on every page on this site to get an idea of how much insurance you may want and how much it will cost you. After you get a basic idea of what you want, it’s best to speak directly to an agent at this point. They are many unspoken things that you may discover just by having a short conversation with a knowledgable agent.

What is an Insurance Agent?

insurance asian agent

An insurance agent is basically a broker who represents several insurance companies. An insurance agent will save you a lot of time and effort. They can negotiate a better deal for you than if you don’t use one, especially if you have any health issues. They will generally find a better policy and/or better price than you would get without using one. An insurance broker can save you a lot of time and effort.

What is an Insurance Company?

Insurance company building

An insurance company is an entity that provides insurance to you, the insured, or policyholder.  An insurance company is also known as an insurance carrier or underwriter. You pay insurance premiums negotiated by an agent in order to have you or your beneficiaries receive a satisfying, financial benefit.

How to Choose a Life Insurance Company?

Usually, a reputable agent will search for a multitude of insurance companies for you to find the best price and coverage. Of course, this depends on your health and budget. You can choose which plan you prefer and your agent will support you and negotiate the best deal for you.

So it’s really simple.  First, you select an insurance broker agency and their agent goes to bat for you at the life insurance company.

If there’s a certain company that you prefer to work with, tell your agent and they will take care of it.  You don’t have to pay any more for your policy because insurance agents do not operate like a real estate agent. They don’t charge you any commission. It won’t cost you a red cent extra whether you use an agent or not. However, you will have a great advantage if you do. Most often, insurance companies require that you hire an agent in the first place.

What If I Go Directly to an Insurance Company?

If you directly call up an insurance company like Mutual of Omaha, they will tell you you need an agent.  They will assign you a random agent from their network, who is dedicated to them.

However, if you call up an independent broker like Protect With Insurance, they are more loyal to you rather than a particular insurance company. An independent broker will scour several companies to get you the best deal.

So once you hire an independent insurance agent or agency, they connect you with the life insurance company after they negotiated the better policy and premium price just for you.  Then you have two points of contact. You can call the agent that works with you directly, or you can just reach out to the life insurance company.

What’s the Best Type of Insurance for Me?

choosing insurance plans

Whole Life is the same as Burial Insurance for Seniors, a Final Expense Policy, or a Funeral Policy.

seniors dancing burial insurance

Whole life insurance offers unchanging premiums and a guaranteed cash value accumulation. Whole life insurance is great for seniors because it lasts forever.  It doesn’t expire. The price will never increase and the coverage or death benefit is never going to change. Basic whole life is pretty flexible in terms of getting qualified and getting approved. Plus, there’s a terrific add bonus to whole life insurance because it accumulates an extra taxfree cash value slowly over time.

 Universal Life Insurance

Universal Life Insurance is a policy that has flexible premiums.  It also includes death benefits along with a savings option. Universal life insurance policies allow you to stop paying premiums if you incur sudden financial problems. Universal life insurance is also called adjustable life insurance because of the flexibility it offers. You can increase or reduce your death benefit and adjust your premiums at any time in any amount.

Term Life Insurance

Term life insurance is also known as pure life insurance. It is a straightforward, simple type of life insurance. It has a definite expiration date. Term life policies guarantee you a death benefit as long as you die during the specified time. Once the term expires, you can either renew it for another term. You can also convert the policy to permanent whole life coverage. Thirdly, you can allow the policy to terminate. Beware, the premiums do increase over time. Once the term policy reaches its expiration date,  the price will go up. Now, you are older and in the meantime, you may have inherited some health issues. It may be more costly and difficult to get approved for if you want to renew it. Also, term policies are difficult to get approved of, if you have any health issues.

Accidental Only Life Insurance

Accidental Death Only also known as death and dismemberment (AD&D) insurance is usually a rider to an insurance policy. The rider covers the unintentional death or dismemberment of the insured due to an accident. Dismemberment includes the loss of body parts or functions. It will only pay your loved ones if you die due to an accident.   Statistically, a third of the deaths are accidental deaths. So it’s a bit of a gamble

 Don’t Wait Too Long

young group don't wait

There’s a direct correlation between your current age and health when you take out a life insurance policy. They both determine what your premium price is going to be. So the older you are, the more expensive your policy is going to be.  So just be aware of that. The sooner you get it, the better.

Believe it or not, but your health factor can be overcome with a skilled agency like Protect With Insurance. We have access to the top A-rated insurance companies that can offer you more affordable policies even with health issues.

Our A-rated insurance companies oftentimes can give you a Preferred Health rating, which is an extremely high health rating. That rating subsequently brings your price down. So it’s a lot more affordable.  We can help you get your existing insurance premiums down up to 20% with a preferred health rating and at the same time increase your coverage.

In conclusion, whatever type of life insurance policy you decide to get, the older you are the higher your premiums and the lower your coverage. So don’t wait too long to get a life insurance policy. Get started right away by checking for actual prices for different policies or taking advantage of our free online instant quotes.

Contact us at Protect With Insurance for more assistance or start a chat now.