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How life insurance can help protect your family and your financial goals
Important legal information about the email you will be sending. By using this service, you agree to input your real email address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an email. All information you provide will be used by Fidelity solely for the purpose of sending the email on your behalf. The subject line of the email you send will be «Fidelity. When you have a family, protecting them is job number one—and that includes planning in the event of your death.
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Important legal information about the email you will be sending. By using this service, you agree to input your real email address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an email. All information you provide will be used by Fidelity solely for the purpose of sending the email on your behalf.
The subject line of the email you send will be «Fidelity. When you have a family, protecting them is job number one—and that includes planning in the event of your death. Would your family be able to pay the bills, send the children to college, keep the business running without you? Fortunately, life insurance can provide your loved ones with necessary resources in their time of need. To get started, you should determine how much life insurance you may need.
Our Term Life Insurance Needs Estimator is a good place to start for common needs, but you may want to consult a financial advisor for more complex estate planning. By combining the advantages of different life insurance products, you can help secure your family’s financial future. Read Viewpoints on Fidelity. Like diversifying an investment portfolio, choosing a few different life insurance options can offer you a broader range of coverage opportunities.
Below, we review the different types that are available, which may help you have a better understanding of how they work and the potential role they could play in your overall protection strategy. Group life insurance is purchased by a well-defined group, such as the company you work for or a professional organization you belong to. In the case of a company, employers own the group policy and offer coverage to eligible employees, either at no cost as part of an employee benefits package, or as an elected benefit at a group rate.
It’s important to understand that if your employer pays for or provides benefits, the employer determines coverage limits, controls the policy, and can change or discontinue it at any time. This type of coverage may end when you separate from service with your employer.
Group insurance rates are based on the makeup of the group of employees or members who are covered and, when coverage is provided to all eligible employees, do not take into account the health issues of any particular individual. As a result, there is no individual health assessment—or personal underwriting—involved. In many cases it can be advantageous to take over a company insurance policy, making it fidelity investments life insurance policy individual policy, immediately after separating from an employer.
Typically, employers will make some baseline level of life insurance coverage available to all eligible employees. Sometimes an employer will make additional optional life insurance coverage available, which the employees must elect and pay for themselves.
In these situations, there may be an amount available without evidence of insurability proof of good health when an employee first joins the company, but coverage must be elected right away, often within 60 days of employment. Individual life insurance is most often purchased to insure one life.
Some individual policies may include additional lives typically children through a policy rider. Individual life insurance can be temporary for example, term to cover a certain number of years; or permanent for example, whole or universal lifewhich is intended to provide lifetime coverage. Permanent policies typically have a savings element that is referred to as a cash value.
The cash value of a policy accumulates over time as premiums are paid. For both temporary and permanent forms, individuals usually must go through a health assessment underwriting to determine coverage eligibility and cost. With individual life insurance, unlike with group life insurance, the individual controls the policy and chooses the coverage amount, term if applicableand any optional extra coverage riders. Typically, an individual policy stays in force as long as the owner continues to pay the premium, or if there is enough of a cash value in the policy to sustain it.
The chart below details some of the major differences between group and individual life insurance. Understanding these differences will help you see how each type of insurance might help play a role in your own financial plan. Typically, group life insurance can be an attractive option, particularly for people who may not pass preferred underwriting guidelines for individual coverage.
Purchasing additional coverage—beyond what is paid for and provided by the employer—will help these individuals meet their full life insurance need. However, that may require an individual medical exam, which may prohibit coverage at a potentially favorable group rate. Alternatively, for individuals who are in favorable health and meet the preferred underwriting guidelines for individual coverage, it may be in their best interests to meet their full life insurance needs with an individual policy, because their health status may qualify them for more favorable pricing than offered by the employer’s group rate.
Another consideration is how the costs will change as you age or if you leave your employer. Find out if you’ll be able to continue coverage at similar costs or if rates are higher for those no longer employed with the company.
This will be a good indicator to determine how much you want to rely on group coverage for the long run relative to individual life insurance. For many people, combining—or layering—the best aspects of each type of insurance can help them build a protection plan that is right for.
Ewanich points out that many people fill the largest part of their individual insurance need with term life insurance, given the lower cost. Based on your budget and the possible need to transfer wealth at some point, Ewanich says you could also add a layer of permanent insurance now while you are in good health, or revisit whether you may need to add permanent insurance later in life.
Purchasing an individual policy requires a few steps. For one thing, it requires doing some homework in terms of selecting a reputable company and determining the right amount of coverage. In addition, a prospective candidate typically must go through a health assessment to determine eligibility. Depending on your family’s needs and goals, you will need to make the choices that best address your individual situation. While working with a financial advisor is suggested for complicated estate planning needs, you should be able to address common goals, including college funding or mortgage protection, by balancing the best of group and individual life insurance.
Ultimately, what you hope to create is a life insurance program that not only fits your budget, but includes key ingredients to help serve specific purposes within your financial plan.
Contact a Fidelity life insurance specialist at from 8 a. Eastern time, to learn. Project your annual income and estimate your insurance coverage needs between now and your retirement date. See how life insurance and long-term care can help protect your family and your financial goals. Get a weekly email of our pros’ current thinking about financial markets, investing strategies, and personal finance.
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How life insurance can help protect your family and your financial goals
If your insurance need is for your lifetime, then permanent insurance, such as universal life insurance may be an appropriate solution. The coverage amount is how much will be paid to your beneficiaries. Determined by health, family medical history, lifestyle, and other factors. As with any search engine, we ask that you not input personal or account information. Your email address Please enter a valid email address. They are not recommendations to purchase, hold or terminate any insurance policy or contract issued by an insurer, nor do they address the suitability of any particular policy or contract for a specific purpose or purchaser. Life insurance solutions. Message Optional. The tax information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Your email fidelity investments life insurance policy Please enter a valid email address. Universal life insurance A flexible, permanent solution for preserving the wealth you plan to transfer. Fidelity can help you determine an adequate level of life insurance protection. Premiums paid on a monthly or semi-annual basis will be charged an additional service fee. Layering life insurance for full coverage Learn why a mix of group and individual life insurance policies may be a smart choice. To buy or learn more Have us call you Find an Investor Center.
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