Due Life Insurance

Due Life Insurance Plan

Your Due Life Insurance plan offers affordable, reliable term coverage. Starting at just $5/month, there are no hidden fees. Just a simple, straightforward life insurance plan for the average person like me and you.

resilient retirement

The Pros of Life Insurance

What’s the main reason why you should purchase life insurance? Because life insurance provides your family financial confidence and stability in the event of your death. If you have more life insurance, the more your family will be able to benefit from it. As an example, if your work offers $20,000 in life insurance, that certainly isn’t much. After all, the average cost of a funeral is between $7,000 and $12,000. So, that might cover funeral expenses and maybe a couple of mortgage payments.

 

However, if with a larger coverage amount, you and your loved ones can experience the following advantages;

  • Replacement of lost income if you lose your job or salary
  • Mortgage payoff
  • Repaying other debts, such as credit cards, car loans, and student loans
  • A college education fund for your children
  • Offering assistance with other responsibilities, such as care for aging parents

Different policies can provide you with additional benefits, in addition to your coverage amount, such as;

  • Generally, death benefit payouts are tax-free. Also, some policies allow the transfer of funds to heirs with minimal tax liabilities.
  • Over time, some policies accumulate cash value. Eventually, you can use the money to help subsidize your expenses, or even live off of it when you retire.
  • For additional protection, life insurance can usually be bundled with other insurance products, such as disability insurance.
  • Many policies come with valuable riders or clauses that provide additional benefits before death.
Get Better Health Insurance
insurance

The Cons of Life Insurance

Generally speaking, life insurance is a sound investment. However, it’s important to consider its drawbacks before committing to a policy.

  • If you purchase a life insurance policy through an insurance agent, expect sales commissions. In some cases, the agent may steer you towards a more comprehensive policy that you don’t really need. As a result, they’ll receive a larger commission. 
  • Depending on your age and health, life insurance can be expensive. In fact, it can be difficult to find a reasonable rate if you’re in poor health or as your get older. In some cases, you may not even qualify. 
  • While the cash value portion of a life insurance policy is often a safe investment vehicle, the rate of return is weaker than other investments may provide. For example, when compared to an IRA or stocks, the cash value of insurance policies offers weaker investment returns.
  • Some policies, such as permanent life insurance, can be costly. The reason is that coverage lasts for a person’s entire life — regardless of age or health.

Why choose Due for your custom Pension program?

WSJ Reported that the #1 worry for people when they retire is running out of money. No more worries. There are no tricks up our sleeves. We don’t have some complex algorithm. We keep it simple. We don’t have you take on the risk. We guarantee a fixed monthly percentage and stick to it. Start a Due private Pension online in minutes. We’re on a mission to help everyone enjoy a worry-free retirement, by creating a Pension that’s fit for the 21st century.
annuity-agreement
annuity and tax mistakes

You Are Always in Control

When your mortgage is paid off and your kids are all grown and out of the house, you’ll need less insurance. When this happens, you can adapt your plan by “laddering,” or simply leave it the same. There’s no right or wrong answer. You have the power to choose whatever’s right for you.

Get Started
Applying for an account is free and
takes less than 2 minutes

What is Life Insurance?

The Ultimate Guide to Life Insurance

In 2020, 54% of people in the United States were covered by some type of life insurance. As for the other 46%, they may not be all that familiar with life insurance. Not that you can blame them. 

 

Between the industry jargon and misconception that life insurance is too expensive, they may avoid putting this off. 

 

However, life insurance shouldn’t be overwhelming or avoided. After all, the main purpose of life insurance is quite simple. If something were to happen to you, your family can maintain their current lifestyle. Life insurance also guarantees long-lasting financial security. And, most importantly, it gives everyone in your household peace of mind.  

 

But, that’s just skimming the surface. In the following guide, we’ll explain more in-depth what life insurance is, how it works, and why you need it.

What You’ll Find in this Guide

You don’t need to be an expert regarding life insurance to get started. As a life insurance policyholder, you’re able to have peace of mind while you are alive. Moreover, your family will be financially supported in the case of your death. As such, if there are people who depend on you financially for expenses such as everyday living and college tuition, life insurance makes a lot of sense. And, it can also provide you with a retirement income. 

 

Life insurance plays an important role in the financial, emotional, and personal stability of you and your family. The sooner you purchase a policy, the more options and flexibility you’ll have, as well as the financial stability you’re relying on for in the future.

 

At the same time, because the insurance industry can be confusing, you should at least be aware of life insurance basics. And, that’s exactly what you’ll find in this guide. Throughout it, we’ll discuss the advantages, disadvantages, and various types. You can then use this information to ensure that you have an affordable policy that meets your unique needs.

Chapters - Due Life Insurance Chapters

Life Insurance FAQs

What is life insurance and why do I need it?

The loss of a loved one is never easy. In fact, it can be emotionally devastating. As if that weren’t challenging enough,  it can also have a significant impact on the family's financial future. After all, without the deceased's income, it will be more difficult to pay expenses like a mortgage or a child’s education.  

 

And, that is the primary reason why people purchase life insurance; to ensure that their families are secure financially. 

 

Upon your death, a life insurance company promises to pay out a sum of money to those who depend on you. The premiums you pay are in return for this peace of mind. A life insurance premium can vary based on a number of factors, including age, gender, medical history, and the policy amount.

 

If you pass away, life insurance will provide the beneficiaries, or people you specify, with money that can be used however they like. Typically, this includes income replacement, covering essential living expenses, and paying off debts. However, it can also be used for estate taxes, medical and funeral expenses, and funding a child’s education. And, in some cases, life insurance can be used to supplement your retirement savings.

What is the right kind of life insurance?

There is no universal life insurance policy. 

 

Depending on the policy, you may have coverage for your entire lifetime or only for a specific period of time. There are some that build cash values and others that don't. Other policies allow you to switch from one type of insurance to another. There may also be other benefits you can receive while still alive if you have a life insurance policy. 

 

Overall, however, life insurance comes in two basic categories: term and permanent.

 

  • Term insurance normally has lower premiums in the early years of the policy. But, the cash value of the account does not accrue for future use. You should consider term insurance if you need coverage for a specific period of time. If you die within that term, the death benefit is paid. Term insurance generally provides the best value for your premium dollars. 
  • A permanent policy provides long-term financial security (such as universal life, variable universal life, or whole life). Often, these policies include death benefits as well as cash savings. Generally speaking, premiums are higher because of the savings component.

How much life insurance do I need?

“It’s hard to pinpoint how much life insurance you should buy down to the penny,” notes Georgia Rose for Nerdwallet. However, you can use an online life insurance calculator to get a ballpark figure on how much you’ll need.

 

“In general, you should add up your long-term financial obligations, such as mortgage payments or college fees, and then subtract your assets,” adds Rose. “The remainder is the gap that life insurance will have to fill.”

 

Other strategies you can use to estimate this figure include;

 

  • Multiply your income by 10.
  • Buy 10 times your income, plus $100,000 per child for college expenses
  • Use the DIME formula, which stands for debt, income, mortgage, and education. These are the “four areas that you should account for when calculating your life insurance needs.”

How many years should my life insurance policy be?

Honestly. It depends. 

 

Your main consideration should be the duration of the coverage. Term life insurance, which is generally sold with terms of five, 10, 15, 20, 25, or 30 years, may help your children prepare for college or other future endeavors, for instance, if you have young children. Alternatively, if your child is currently not in college and supports himself or herself, a shorter policy period may be more suitable.

 

Other considerations would be the length of your mortgage and the number of years until you retire. 

Is life insurance taxable?

Beneficiaries of your estate generally receive death benefits tax-free. With permanent life insurance, the cash value accumulates tax-free. That means as long as the policy remains in effect, all income earned would be tax-free.

An annuity is a financial product offered by insurance companies. Individuals pay monthly or in a lump sum and receive either a lump sum or regular payments over a period of time.

How much does life insurance cost?

You may be surprised by how affordable workplace life insurance can be. A quality company can provide term life insurance coverage at a surprisingly low cost for most people.  Even if insurance through your employer isn’t an option, it’s still not as expensive as you may think. But, premiums are based on factors such as age, sex, height, and weight. Your health status, like whether or not you smoke, occupation, and state you live in are also considered.

Typically, the cost of life insurance increases as you age, and the kind of coverage you choose will also affect your premium. And, term policies tend to have lower rates, whereas permanent policies tend to have higher rates.

When is the best time to buy life insurance?

It’s strictly dependent on your needs when it comes to buying life insurance. Again, the younger you are, the cheaper your life insurance is. At the same time, you shouldn't buy it until you've determined that you truly need it. As an example, you've recently started a family.

Who should I buy life insurance from?

While it may tempting to purchase the cheapest policy you can find, you ultimately want to work with an insurance company that’s financially sound. 

 

Work only with a company that has strong financial ratings from independent rating agencies like A.M. Best, Moody’s, and Standard & Poor’s. Ratings are usually provided by insurance companies on their website. But, you can always request company ratings from your life insurance agent.

Can I change or update my life insurance?

Yes, you can. Usually, this is done when you amend your life insurance policy with your existing provider. For instance, buying additional life insurance to your current policy. It’s also possible to cancel your existing policy and find a better deal by finding another plan.

 

However, you should only do this when you have to. Examples would be if your family grows, you’re moved or remortgaged your home, or your property value has increased. Other circumstances would be if you paid off your home, you’ve found a cheaper policy, or you’ve changed your finanical strategy.

Can I withdraw money from my life insurance?

A life insurance policy that has cash value offers several options for allowing you to tap into its value while you’re still living;

 

  • Withdrawing money from the policy
  • Surrounding the policy
  • Borrowing against the policy
  • Using the policy to pay your premiums. 


“You might be allowed to withdraw money from a life insurance policy with cash value on a tax-free basis,” says John Egan for Experian. “However, if the sum you take out surpasses the amount of money you've built up as the cash value under your policy, you'll be required to pay income taxes on that money.”

How much cash value is in my policy?

The simplest answer? Take a look at your policy. In it, you’ll find the answer table which should contain a cash value chart. If you're still unclear about the cash value, contact your agent.

What can I do to make my life insurance policy more affordable?

To save money on your premiums and keep them as affordable as possible, try the following;

 

  • Buy it now. The older you are, the higher the premiums for the same coverage. Furthermore, as you delay, you run the risk of developing a serious health condition that may skyrocket your premiums, or even make you uninsurable.
  • If you want permanent life but you're on a budget, consider some term for now. Purchasing some term life along with permanent life will allow you to save money initially. Once your budget increases, consider switching from a term to a permanent life policy.
  • Consider group life insurance offered through your employer. It could be a relatively inexpensive option. Keep in mind that it’s possible that your group coverage will cease when you leave your job or become more expensive as you age.

Is a physical exam required?

You will have to take the exam if you apply for a traditional policy. There are, however, some companies that provide coverage of up to one million dollars without requiring an examination. Moreover, certain policies do not require you to take the exam, such as final expense insurance.

 

Why is an exam usually required? Well, you wouldn’t buy a car without test driving it first, right? 

 

Insurers are liable for thousands, sometimes even millions, if you die soon after obtaining the policy. As such, exams help them find out how risky you are to insure. Moreover, this ensures that individuals with terminal illnesses or who are otherwise likely to die soon can not get a policy.

Who can take a policy out on my life?

A life insurance policy can only be purchased by someone who has an "insurable interest". As such, you can't insure your life with someone whom you just met on the street. Those who have an insurable interest include immediate family members. But, it’s also possible, in some circumstances, that your employer or business partner has an insurable interest.

Institutions or individuals who become your major creditors may also be entitled to insurance interest.

Must my beneficiary have an insurable interest?

Short answer? No. 

When you purchase a life insurance policy on your own life, you become the policy's owner. As such, you have the right to name a beneficiary -- even if it’s an absolute stranger.




Why is term life often called “temporary” insurance?

Because term policies last only for a specific period of time, insurance agents may refer to term insurance as "temporary." Don’t get worked up over this minute detail. In actuality, your homeowner's or auto insurance is probably no more "temporary" than that. 

 

Both of these types of policies cover you for a particular amount of time, and they must be renewed upon expiration.

What happens to my life insurance policy upon death or if I outlive the coverage term?

A death benefit is paid by the insurance company when you die. The stated death benefit cannot be exceeded regardless of the amount of cash value in your policy at the time of your death.

Just note, your death benefit will be reduced by any loans you have not repaid (plus interest). In this case, your beneficiary may wind up receiving less than the policy's face value. There is an exception, however. There are some whole life policies that will cover both the death benefit and the cash value.

But, what if you outlive your term life insurance? If your policy expires, you won't get a refund for your premiums. But, once your term policy expires, you could convert it to a permanent policy.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More