Life insurance is crucial to protecting you and your loved ones. It can fulfill promises if you are no longer able, provide benefits while you're living and protect your family if illness or injury should occur. Unfortunately, the options life insurance presents can be confusing, and advertisements for low-cost term life insurance are no help. Nevertheless, protecting your life and health is important. Summit Insurance can provide answers to detailed questions about the various policies available. We will work with you to review your options and assist in selecting the right policy and the appropriate amount of coverage for you.

Advantages of Life Insurance

• The death benefit provides tax-free income to your named beneficiary(s) to be used to pay funeral expenses, debt, tuition, estate taxes or virtually any financial need you leave behind, and can protect your business by enabling partners to buy out the interests of a deceased partner and prevent a forced liquidation.
• Living benefits ensure the cash value growth of a permanent life insurance policy is tax-deferred. Loans or withdrawals can be taken against the cash value of a permanent life insurance policy to help with expenses.

The Ohio life insurance industry is very competitive as there are dozens of companies that do business here. Below we explain about term life insurance.

Term life insurance in Ohio is becoming a commodity, but there are a few things you need to watch out for and consider. After you determine how much coverage you need, and for what period of time, make certain you understand these three variables. Not all Ohio life insurance companies offer the same provisions.

The insurance company is financially secure and able to pay a claim that may not happen for dozens of years. Companies such as AM Best, Standard and Poor's, and Demotech provide financial stability ratings that you should use as a guide.

The term life policy premiums should be guaranteed not to increase during the policy term chosen. This is the case with most, but not all insurance companies.

The policy should be convertible to a permanent plan of protection without showing evidence of insurability. If you purchase a 20-year term policy and develop a life threatening condition in the 19th year, you want to make certain that you'll have protection beyond the 20th year. This is where the insurance policies can differ. Make certain you understand this. The new policy will be at a much higher premium, but will be based on your health category when you purchased the term policy.

Only after you are comfortable with the three items above, should you consider price.

What factors determine life insurance premiums?

The life insurance company is betting that you will outlive the length of the term policy you choose. You hope they are correct! Many factors determine the premium you'll be asked to pay and you should understand them. Besides the amount of coverage, known as the face amount, and the length of the term you want, the insurance company looks at the following:

• Your age - some companies use actual age, others use your nearest birthday age.
• Height and weight - anything outside a range can increase premiums.
• Family history - parents or siblings with a history of cancer, heart disease or diabetes can increase premiums.
• Use of tobacco. Premiums are between 2.5 to 3 times more expensive for tobacco users.
• Your medical history, or if you're taking prescriptions can affect the premium.
• Avocation - certain occupations have a higher risk of death.
• Travel to certain parts of the world.
• Past or present drug use.
• Driving history, including tickets and alcohol impaired convictions.

Unlike auto insurance, where we can tell you exactly how much you'll pay, life insurance is different. Until the application and the results of the medical examination are reviewed, you won't know with certainty what they are asking you to pay.

The Life Insurance Application Process

Once we find a policy and an insurance company that fits your needs, we need to "apply", by completing an application. Generally speaking, there are several pages that ask about possible medical conditions you have or have had. Some insurers have gone to a simpler application that only asks a few medical questions and then calls the applicant for a phone interview. The application records your beneficiary and contingent beneficiary designations. For most life policies there will be an exam scheduled where a nurse will meet you at your home or office and do a few things. He or she will get your height and weight, blood pressure, collect blood and urine, and possibly, depending on the amount of coverage, or special circumstances, perform other tests. This usually takes 20 minutes or less. It's important to note that coverage is not automatically in effect, and you're not required to pay any premium at the time of application. You can, however, make a down payment on the policy, and possibly have coverage in effect. If you qualify for the rating classification applied for, and you've made the appropriate down payment based on it, and the medical exam has been completed, then coverage could apply. Many people choose to wait until they are "approved" to pay. Often, the rating class applied for changes. Sometimes people qualify for a better premium and sometimes the premium is worse. You don't have to accept the policy, even if it comes in better than expected.

Assessing Your Need for Life Insurance

The amount of life insurance you select should be dependent on your personal and financial needs. We can assist you in determining an appropriate coverage amount and which type is right for you. Generally, you should consider life insurance if you have:

• A spouse
• Dependent children
• Aging parents or a relative who depends on you for support
• Retirement savings insufficient to ensure your spouse's future financial well-being
• A sizable estate
• A business

Life changes--so should your policy. As life events happen (such as: marriage, divorce, a new baby, purchase of a new home, retirement, etc.) you may want to reevaluate coverage to adapt to your needs.

Types of Life Insurance

Advantages of both death and living benefits vary. We'll work with you to find the best company and coverages for you and your family.

• Term Life Insurance provides life insurance protection for a specified period of time. If you do not currently have life insurance, term can be a good place to start. It's generally less expensive than permanent life insurance, and is available in varying term periods with fixed premiums from a one- (annual renewable term) to 20-year period (level term). Also, term insurance is sometimes convertible to permanent coverage, providing you with flexibility as your needs change.
• Whole Life Insurance is a form of permanent life insurance that remains in force during the insured person's lifetime, provided premiums are paid as specified in the policy. Whole life can build cash value.
• Universal Life Insurance is a form of permanent life insurance characterized by its flexible premiums, flexible face amounts and unbundled pricing structure. Universal life can build cash value, which earns an interest rate that may adjust periodically, but is usually guaranteed not to fall below a certain percentage.