At RPM Insurance Agency, we know it's difficult
to imagine a time when you won't be there to help
provide for your family. That's why RPM Insurance
Agency is pleased to offer a suite
of Life insurance products designed to help answer
your Life insurance requirements, at any stage of
life.
Whether you're a new family, empty nester,
business owner, or single parent, RPM Insurance
Agency has a Life insurance option to suit your needs
and budget. For a personalized assessment of your
Life insurance coverage needs, including customized
Term Life, Whole Life, or Universal Life insurance
quotes, contact RPM Insurance Agency.
Why do I need Life Insurance?
Life insurance is an essential part of financial
planning. One reason most people buy life insurance
is to replace income that would be lost with the
death of a wage earner. The cash provided by life
insurance also can help ensure that your dependents
are not burdened with significant debt when you die.
Life insurance proceeds could mean your dependents
will not have to sell assets to pay outstanding bills
or taxes. An important feature of life insurance
is that no income tax is payable on proceeds paid
to beneficiaries. The death benefit of a life policy
owned by a C corporation may be included in the calculation
of the alternative minimum tax.
How much Insurance do I need?
Before buying life insurance, you should assemble
personal financial information and review your family's
needs. There are a number of factors to consider
when determining how much protection you should have.
These include:
- any immediate needs at the time of death, such
as final illness expenses, burial costs and estate
taxes
- funds for a readjustment period, to finance a
move or to provide time for family members to find
a job
- ongoing financial needs, such as monthly bills
and expenses, day-care costs, college tuition or
retirement.
Although there is no substitute for a careful evaluation
of the amount of coverage needed to meet your needs,
one rule of thumb used is, buy life insurance that
is equal to five to seven times annual gross income.
If you want to be more precise, take the time and
complete the Needs Analyzer
Choosing A Plan
Buying life insurance is not like any other purchase
you will make. When you pay your premiums, you're
buying the future financial security of your family
that only life insurance can provide. Among its many
uses, life insurance helps ensure that, when you
die, your dependents will have the financial resources
needed to protect their home and the income needed
to run a household.
Choosing a life insurance product is an important
decision, but it often can be complicated. As with
any other major purchase, it is important that you
understand your needs and the options available to
you.
The main types of life insurance available are term
and permanent. Term insurance provides protection
for a specified period of time. Permanent insurance
provides lifelong protection. To learn more about
term and permanent insurance click on the appropriate
button at the top of this page.
Additional Points
1. What happens if I fail to make the required payments?
If you miss a premium payment, you typically have
a 30- or 31-day grace period during which you can
pay the premium. After that, the policy will lapse.
You may be able to reinstate with evidence of insurability
depending on your policy's provisions. If your policy
has sufficient cash value, the company can, with
your authorization, draw from a permanent policy's
cash surrender value to keep that policy in force.
This does not apply to term insurance because there
is no cash value to draw from. In some flexible premium
policies, premiums may be reduced or skipped as long
as sufficient cash values remain in the policy. However,
this will result in lower cash values.
2. What if I become disabled?
Provisions or riders that provide additional benefits
can often be added to a policy. One such rider is
a waiver of premium for disability. With this rider,
if you become totally disabled for a specified period
of time, you do not have to pay premiums for the
duration of the disability.
3. Are other riders available?
(availability and specifics of these riders vary
by carrier and state.)
- "Accidental death benefit", provides for an additional
benefit in case of death as a result of an accident.
- "Accelerated benefits", also known as "living
benefits." This rider allows you, under certain
circumstances, to receive the proceeds of your
life insurance policy before you die. Such circumstances
include terminal or catastrophic illness, the need
for long-term care or confinement to a nursing
home.
- "Child rider", provides insurance for all your
children, usually from $1,000 to $20,000 of death
benefit.
4. When will the policy be in effect?
If you decide to purchase the policy, find out when
the insurance becomes effective. This could be different
from the date the company issues the policy.
5. How do accelerated death benefits work?
It allows policyholders to receive all or part of
the policy's proceeds prior to death under certain
circumstances, including the need for long-term care
and confinement to a nursing home. Because payments
may affect tax status and Medicare eligibility, and
will be deducted from the overall benefits paid later
to beneficiaries, policyholders should thoroughly
investigate options in advance.
6. By using medical tests are insurers trying to
eliminate any applicant likely to develop a serious
health condition?
Medical tests can provide accurate and current information
about an applicant's health, thus enabling insurers
to charge premiums that reflect the level of risk
an applicant represents. Because some health conditions
are easily managed through proper medication, therapy
or lifestyle changes, medical information sometimes
makes it possible for insurers to cover applicants
who might not otherwise be insurable. More serious
or incurable conditions present an enormous risk
that an insurer simply cannot assume.
7. What should I consider in naming life insurance
beneficiaries?
- Always name a "contingent," or secondary, beneficiary,
just in case you outlive your first beneficiary.
- Select a specific beneficiary, rather than having
the proceeds of your life insurance paid to your
estate. One of the great advantages of life insurance
is that it can be paid to your family immediately.
If it is payable to your estate, however, it will
have to go through probate with the rest of your
assets.
- Be very clear in wording beneficiary designations.
Naming specific children may exclude those born
later. If your child dies before you, do you want
the proceeds to go to that child's children? Changing
the beneficiary designation is easy, but you have
to remember to do it.
8. Does it make sense to replace a policy?
Think twice before you do, because in many situations
it may not be to your advantage. Before dropping any
in-force policy, make sure your "new" policy is paid
for and in effect and first consider:
- If your health status has changed over the years, you may no longer be
insurable at preferred or standard rates.
- Even if both policies pay "dividends," it may be years before the new
policy's dividends equal those of your present one.
- If you replace one cash-value policy with another, the cash value of
the new policy may be relatively small for several years and may never
be as large as that of the original one. There may also be a period wherein
a surrender charge is applicable on the first policy.
- You should ask for a detailed listing of cost breakdowns of both policies,
including premiums, cash surrender value and death benefits. Compare these
as well as the features offered by both policies.
- If you decide to surrender or reduce the value of the policy you now
own and replace it with other insurance, be sure your new policy is in
force before you cancel the old one.
9. As a single person, do I need insurance?
The answer almost always is yes. You may want to consider these options:
- Disability income insurance - especially important for self-supporting
singles without sizable assets, this can replace a good part of the income
you would lose if you were unable to work because of accident or illness.
If you don't have long-term disability coverage at work, it would be wise
to consider an individual policy designed to replace at least 60 percent
of your income.
- Health insurance - if you don't have on-the-job coverage, an individual
policy is your first line of defense against ever-escalating medical and
hospital costs. You can keep premium costs down by electing a large deductible,
thereby "self-insuring" as much as you can afford.
- Life insurance - even if you have no dependents now, you may later. If
you buy now when you are younger and healthier, you can "lock in" lowest-cost
coverage, including guaranteed insurability.
