What is Life Insurance?

Dec 13, 202112/13/2021

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Wealth & Giving

Do you have a spouse, partner or child depending on you? Did you buy a home with a spouse that is based on two incomes? Then you may be wondering, “Do I need life insurance?” Perhaps you have thought about getting a life insurance policy but weren’t exactly sure how it works. If you have loved ones that depend on your income, it’s worth knowing how a life insurance policy can protect them if something were to happen to you. We’ll explain how life insurance works, the application process and certain aspects you can receive with your life insurance policy.

 

Types of Life Insurance and How They Work

What is life insurance and how does it work?

In its most basic form, life insurance works similarly to homeowners or auto insurance. You pay a yearly or monthly premium in exchange for a certain amount of coverage. If you pass away, your beneficiaries receive a death benefit.

There are two main types of life insurance policies to choose from: term life and permanent life.

Term insurance gives you life insurance protection for a certain amount of time. If you die during this period, your loved ones receive a death benefit. This is an affordable type of life insurance that provides temporary coverage. Term life insurance is a great option if you are looking for payments that will not increase during a specified time period.

Permanent life insurance provides you coverage as long as your premiums are paid. Some types of permanent life insurance build cash value that’s accessible as it grows over time.

A life insurance death benefit can be used for whatever purpose your beneficiaries choose. From paying everyday bills, paying a mortgage, funeral costs, or helping with your business; the funds can be used in a number of ways.

 

The Life Insurance Application

With WoodmenLife, you can get started by requesting a free life insurance quote. Your local Representative will contact you to prepare a customized plan that best meets your specific needs and budget.

Once you’ve decided on your life insurance policy, you will need to fill out an application. It will ask for basic information such as your name, address and employer. It will also ask you a series of personal questions to help determine the right coverage amount for your lifestyle, including:

  • Your family’s health history
  • Your medical history
  • Lifestyle history (i.e., smoking, drinking, exercise)
  • Financial information, including your annual income

After the Application

After your application is submitted, it will go through a process called underwriting. An underwriter’s main role is to review your health history and lifestyle to determine your premiums. The underwriter is responsible for evaluating your information from medical records, driving records and more.

 

How Does a Life Insurance Payout Work?

Life insurance benefits are provided to your beneficiaries when you pass away. Once your beneficiary submits a claim, the insurance company will review it and pay the death benefit, so long as there are no issues. A beneficiary can be a person, charity or trust. However, certain states may require you to list your spouse as your primary beneficiary and designate them to receive at least 50 percent of the benefit.

Your sole beneficiary will be entitled to the entire death benefit. If you have multiple beneficiaries, they will each equally share an allocated portion of the death benefit.

 

Member Extras that Go Above and Beyond

As a member of the WoodmenLife family1, you have access to a wide range of valuable extras3. From help with paying for education to financial assistance following a natural disaster, these extras are designed to help your family right now. There’s no extra cost nor obligation to use them. It’s just one way our family is committed to helping yours at every stage. Click here to explore all the great extras you have access to when you become a WoodmenLife member.

 

How to Find the Right Life Insurance for Your Unique Needs

You might still be wondering, “What is life insurance?” It can be a lot to take in. But preparing for life’s major needs — through planning for protections like life insurance or saving for retirement — are the best ways to set yourself and your family up for a secure financial future. When you’re ready to purchase or just want to get some more answers on life insurance, WoodmenLife can help. Click here to find your local Representative.

 

 

  1. An individual becomes a member by joining our shared commitment to family, community and country, and by purchasing a WoodmenLife product.
  2. WoodmenLife Extras are available to members. An individual becomes a member by joining our shared commitment to family, community and country, and by purchasing a WoodmenLife product. These extras are not contractual, are subject to change and have specific eligibility requirements.

 

Term Life Forms: ICC16 8648 1-16 & Form 8648 1-16 (XX)

Whole Life Forms: ICC17 8678 1-17; 8678 1-17 (XX)]

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Securities are offered through Woodmen Financial Services, Inc., 1700 Farnam Street, Omaha, NE 68102, member FINRA/SIPC, a wholly owned subsidiary of Woodmen of the World Life Insurance Society (collectively “WoodmenLife”). Securities other than the WoodmenLife Variable Annuity are issued by companies that are not affiliated with Woodmen of the World Life Insurance Society.

Benefits are available to members. An individual becomes a member by joining our shared commitment to family, community and country, and by purchasing a WoodmenLife product. These fraternal benefits are not contractual, are subject to change and have specific eligibility requirements.

Some fraternal benefits include additional membership requirements including length of membership, number of qualifying members in household and/or a qualifying event.

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