Life Insurance Basic Training
Answers to questions you may have about life insurance
Ready to learn the basics of life insurance? Start here. Then, when you’re ready to review your specific needs, schedule a consultation with a Navy Mutual representative.
What is life insurance?
Like auto or health insurance, life insurance creates a financial safety net. This important coverage can help cushion the strain on your loved ones in the event of your death.
While it may not be pleasant to think about, it’s important to consider what could happen to those who depend on you financially. What would their lives be like once you’re gone? Whether you’re an income generator, a caregiver, or both, life insurance can provide an important cash benefit to those you leave behind. This benefit can create future income for your loved ones as well as help offset immediate expenses and debt.
What’s the difference between term life and whole life insurance?
There are two basic types of life insurance: term life and permanent life insurance. Term life insurance provides coverage for a set period of time – typically when a younger family’s financial needs are the greatest. Permanent life insurance effectively creates an immediate estate, since it’s designed to last as long as you do. There are several types of permanent life insurance, each with different levels of risk. Navy Mutual offers whole life insurance – the most predictable and conservative type.
- Term life insurance is there for your loved ones if you die.
- Permanent life insurance is designed to be there for your loved ones when you die.
We can help you decide which type of coverage is right for you based on your individual needs. Schedule a consultation today.
|Term Life Insurance||Whole Life Insurance|
|Length of coverage||● Typically 10-30 years||● Your entire life if your premiums are paid|
|Benefits||● Cash benefit if you die within the term||● Cash benefit upon death|
|Value||● No value beyond policy term||● Accrues additional value|
● Tax-free or tax-deferred
● Often able to borrow against the policy
● Can potentially use to fund long-term care expenses (through an Accelerated Death Benefit feature)
|Cost||● Relatively inexpensive, age- and health-based premiums|
● No guarantee of renewability
|● Typically requires higher premiums than term life policies|
● Premium levels are guaranteed for life
● Provides guaranteed coverage even if the policyholder’s health changes
Do I need additional life insurance if I already have SGLI?
While your life insurance needs are highly individualized, a basic formula for determining your minimum coverage needs is calculated as follows:
Financial Obligations – Assets = Insurance Needed
Financial obligations include your current debts and future income needs, plus any costs resulting from your death such as medical bills and funeral expenses. To help you determine how much life insurance you may need, try our Life Insurance Needs Calculator.
You’ll likely have different coverage needs throughout your life. For example, you may need a certain amount of life insurance when you’re younger and a different amount later in life as your assets and liabilities grow. Keep in mind, defining your retirement and estate planning objectives now – at the youngest possible age – can substantially reduce the costs required to meet your goals throughout various stages of your life.
Your military or uniformed service means you may have additional coverage options as well, including:
- Servicemembers’ Group Life Insurance (SGLI)
- Veterans’ Group Life Insurance (VGLI)
- Other survivor benefits (you can learn more at the U.S. Department of Veteran Affairs website)
To learn more about the different types of life insurance and which may be best for you, download our Life Insurance LookBook.