How to Get Life Insurance in San Francisco
How to Get Life Insurance in San Francisco
Life insurance is a product that sounds simple in concept. But the details can be a bit confusing. For instance, term life and whole life are two different products. Do you know the difference? Can you choose which type of policy is right for you at this particular time in your life? As an area resident, how can your life insurance policy in San Francisco provide benefits to you as well as to your dependents?
These are some of the questions we’ll answer to give you a better idea of what life insurance is all about and how a good policy can provide multiple benefits. You’ll also learn where and how to get life insurance in San Francisco.
What Exactly is Life Insurance?
Let’s start with a very good, though very basic definition of what life insurance is, courtesy of the National Association of Insurance Commissioners: “Life insurance provides financial protection for loved ones should the policyholder die.” The next sentence of definition is perhaps even more at the heart of the product: “Once a policy is issued, an insurer may not cancel it based on a change in the policyholder’s health status.”
So basically, as long as your life insurance policy is active, the face value of the policy will be paid to your designated beneficiaries if you should die.
Two Types of Life Insurance
While the basic description of life insurance is simple, you need to know the difference between types of life insurance policies.
This kind of insurance stays in effect until the end of your life as long as you continue to pay the premiums. In other words, your beneficiaries will get a guaranteed payout based on the face value of the policy when you’re deceased.
This type of policy is only meant to offer coverage during a designated period of time, typically for ten, 15, 20, or 30-year terms. The policy only pays if you lose your life during the time period when your policy is in effect.
The Real Difference Between Term and Life Insurance
The true value of a term life plan is the financial security and peace of mind it offers. If you purchase a 20-year policy as you begin to raise a family, you can be confident that their financial needs will be met if you should die while they’re still very young. The payout might be enough to help raise them and perhaps even help pay for their college education. That’s why a term life policy takes such a load off your mind. In fact, you can consider peace of mind to be one of the major benefits of life insurance.
Those who take out term life policies know that they won’t always need to be as financially responsible for their beneficiaries as they are at the present time. That’s why the policy can have an end date. For instance, a head of household with a growing family knows that, while the kids are entirely reliant on your support now, in time, they’ll be grown and educated and well prepared to be caring for their own needs.
Though more expensive, a whole life policy might be the best choice if you want your beneficiaries—your spouse or grown kids, perhaps—to receive an assured payout at some point in their lives, even if it’s (hopefully) decades from now. Therefore, you don’t mind continuing to pay the premiums until the end of your life.
While not meant to be an investment tool, a whole life policy does have some investment potential and with low risk. You should ask your insurance agent for details.
Average Price of Term Life Insurance by Age in California
Only you can determine exactly how much you should have in life insurance. Think about your current earnings. Compute what your spouse or beneficiaries would have to come up with monthly to pay the mortgage and take care of other bills. What’s the cost of living where you live?
Be careful to avoid underinsuring your life. Whatever face value you decide upon, think about how long it would last if it was invested and released at the rate of your current revenue stream.
As for the cost of your policy, there are many factors that determine what you’ll pay. When you consult with an agent, your age, gender, and general health condition will all serve prominently in determining your premium. And of course, so will the face value of the policy you seek.
The younger and the healthier you are—for instance, you’re a non-smoker—the less you’ll pay. For a rough idea of cost, if you are a healthy male non-smoker between the ages of 26 and 35, you might typically pay about $20 a month for a $500,000 policy over a 20-year term.
But that’s just a general idea. If other factors apply, your rate for coverage could be much different. You’ll get all of your questions answered and receive a cost quote you can trust by contacting your Cost U Less Insurance agent.