Getting the Most Out of Life

Review critical components of life insurance, from policy choices to key facts about benefits and coverage.

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01
Life insurance provides a cash benefit for your loved ones.

While it’s not easy to talk about, obtaining life insurance can be a life-changing decision, especially if you are the main source of income.

02
Term life insurance covers a specific period of time.

Term life can be purchased to cover 10, 15, 20, 25 or 30 years. Whenever you pass away, your beneficiary will be paid in one single payment. If you are still living when the term is over, you have the choice of renewing for another term or switching to permanent coverage.

03
Permanent life insurance is, well, permanent.

As long as you pay your premiums, don’t over loan on the policy, or take other detrimental actions, permanent life insurance covers you for life. While it is more expensive, you accumulate cash value that can be accessed while you’re still alive. ‍

04
With permanent life insurance, some of your premium is transferred to cash value.

Over the course of your policy, this value will grow, and it can be available for your use. However, while this is a nice perk to have, don’t abuse it. Remember that any money you decide to take out also comes out of your death benefit.

05
You can convert term life to permanent, but not the other way around.

While switching from a term life policy to a permanent one is possible, you cannot convert a permanent life policy to a term one. If you have concerns about the length and coverage of your policy, you should speak with your local Alfa® agent about which policy is best for you.

True or False?
An individual’s lifestyle affects their life insurance premium.
Sorry, the correct answer is False.

Life insurance premiums are based on the level of risk the insurance company takes by insuring someone. For example, it would cost more to insure an older, frequent tobacco user than someone who is young with no history of tobacco use. Source

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Life insurance benefits are automatically provided when the insured passes away.
Sorry, the correct answer is False.

To receive life insurance benefits, a beneficiary needs to file a claim with the insurance company. Typically, a death certificate and other signed forms will need to be provided. Once the claim has been reviewed, the insurance company will issue payout through a lump sum or in installments. Source

Next Question
Life insurance benefits can be claimed as soon as a policy is created.
Sorry, the correct answer is False.

If the insured dies within the contestability period — usually two years after the policy is issued — the death claim may not be completed until further investigation. Source

Next Question
Only the wealthy should have a will.
Sorry, the correct answer is False.

The idea that only wealthy people should prepare for death is often associated with a lack of financial readiness. A will can protect your wishes regarding your assets, no matter the value of your estate. Source

Next Question
Some of your debts go away when you die.
Sorry, the correct answer is False.

Some debts may be resolved after death, but not all of them. Your assets may be liquidated to pay off any remaining debt. A will helps specify which assets are used to pay these debts. Having proper life insurance helps ensure your debts are handled after your death. Source

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