Category: Life Insurance

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Factors When Shopping for Life Insurance

Consider These Factors When Shopping for Life Insurance

If you view shopping for life insurance as a dreaded chore, you aren’t alone. Most people don’t want to think about the end of their life, so they put off planning for their loved ones or skip buying life insurance.

Many people think they’re too young to worry about life insurance or have enough money set aside should they die.

This usually isn’t the case, leaving many without the necessary finances.

The pandemic changed the way people think. It made many people realize the importance of planning for the unexpected. So if you’re in the market for life insurance in Los Angeles, here’s what to consider as you shop around.

How Insurance Agents Help

Insurance agents are there to help you choose the products that your family needs. They solve problems for you that you may never have thought of yourself. A qualified insurance agent will discuss your financial situation, future needs, and the type of legacy you want for your family.

Insurance agents ask many questions and dig deep to ensure you plan for your financial future with their products. They may ask you questions you never thought of and make you aware of situations you should consider when planning your life insurance.

It may feel like they are there to sell you something, but they are more like financial advisors, helping you to understand your big financial picture. Life insurance is one of the most important decisions you’ll make in your lifetime and could make or break the financial future of your loved ones. So finding an agent you connect with and who understands you is essential.

Questions Agents May Ask

Throughout your interview with an insurance agent, they’ll ask you pointed questions to ensure you get the proper coverage. These questions may include:

  • What is your annual salary?
  • Does your spouse work?
  • Are you the breadwinner?
  • How old are your children?
  • What do you want your children to have financially if you die prematurely? (aka pay for college, money for a house, etc.)
  • Do you have children that will need long-term care even into adulthood?
  • Do you have a mortgage?
  • Do you have any major liabilities?

Answer the questions as openly and honestly as possible. This will ensure you get the policy and coverage that suits your family’s needs. Focus on the premiums you’ll pay and the protection the policy provides your loved ones.

Qualify any Online Policies

If shopping around and interviewing insurance agents in Los Angeles doesn’t interest you, you might consider an online life insurance policy.

These policies are often entirely acceptable, but always ensure you work with a licensed insurance agent. In other words, don’t just apply online; never talk to a human, and pay your insurance premiums.

Most online policies are suitable for supplementation but won’t cover your loved ones’ complete financial needs if you die.

At the very least, qualify the insurance agent on the other end of the phone, ensuring he/she is licensed in California and has the right to sell you life insurance. The last thing you want is to leave your loved ones without financial coverage when you die.

Determine if you can Pass a Medical Exam

Most life insurance policies in Los Angeles require a medical exam. If you can’t pass the exam, you won’t qualify for fully underwritten life insurance. There are other options, but fully underwritten life insurance is the most affordable coverage.

If you know you won’t pass a medical exam because you have a serious pre-existing condition, you could apply for guaranteed life insurance or simplified issue life insurance. Neither policy requires a medical exam, but the premiums are higher, so keep that in mind as you shop around for the right policy.

Decide if you want the Policy to Have a Cash Value

Term life insurance is the most common life insurance policy. This policy is good for a certain number of years, such as 15 years. If you’re alive after the policy expires (it’s a good thing), but your policy expires.

When your policy expires, you can shop for a new term life policy if you need it, but most people carry term insurance to cover life when their children are young, have a mortgage, or don’t have a large amount of money invested or saved yet.

Cash value life insurance policies have higher premiums, but a portion of their balance gets invested. It’s like a forced savings account. You can use the cash value funds while you’re alive. Say, for example, you are diagnosed with a chronic illness and have a policy with a cash value of $500,000. You can use the funds to cover your medical bills or other expenses.

When you use the cash funds, you can use them as a withdrawal (not paying them back) or as a loan. However, if you withdraw the funds and don’t pay them back, your loved ones will receive less of your death benefit. Say, for example, you had a $750,000 death benefit but used $200,000 of your cash value. As a result, your loved ones would receive $550,000 when you die instead of $750,000.

Final Thoughts

When shopping for life insurance in Los Angeles, you have a lot to consider. Do you want a term or cash value policy? Will you pass a medical exam? Do you need coverage that lasts your lifetime or just to get you through a specific period?

Answering these questions honestly will point you in the right direction. Next, it’s important to work with a qualified insurance agent who understands your financial needs, can pick up on any problem areas your family would have if you died, and can provide you with a qualified life insurance policy.

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Life Insurance is Your Friend

Life Insurance is your friend, here’s why.


Financial planning is a fundamental part of life and as we grow older, start a family, or grow our business, we understand the importance of having a safe financial back-up for everything just in case. Similarly, everyone needs a financial plan to protect their family when they leave them forever. At the time of death, a life insurance policy can cover funeral expenses, debt, or mortgage payments and can also guarantee a consistent income for your family. This can save your family from the burden of debt and financial dependence.

There are several life insurance policies in the market that you can choose from depending on your level of income and your financial asset mix. A typical insurance policy is affordable and allows suitable coverage of all liabilities and expenses your family will have to endure when you are no longer there to help. This can give you peace of mind knowing that your family will be financially protected and over the years.

Whether you are single, in a relationship, or married and have kids, life insurance is equally important for all. Life insurance can cover all kinds of debt including personal loans, mortgage, credit card loan, an auto loan.


Types of Life Insurance Policies


Term Life Insurance

Term Life insurance is often called pure life insurance, because it is only available to the beneficiaries and is available when the insured passes away. Although the life insurance of this type is only applicable when the insured dies, it guarantees the payment to beneficiaries whenever the insured dies within a specified period. Most commonly, this period is 10-30 years.


Whole Life Insurance

Whole life insurance is a policy that grows your cash value over time and will last for the duration of the insureds life. The policy is dependent on cash value building. A part of the premium is invested and it earns interest. The life insurance is permanent for life and it covers the duration of your entire life, not specific to your life years.


For example, if a person has a term life insurance until 70, the same person’s beneficiaries will receive the amount whenever the person dies. However, whole life insurance is paid, even if you continue to live.


Universal Life Insurance

Universal life insurance is the all in one investment. It is permanent life insurance that also allows a personal savings and investment plan. Another key element that makes universal life insurance an attractive option for policyholders is low premiums. The policyholder must pay a monthly fee with universal insurance. This monthly fee is split into two parts by the insurance company, one part is kept for insurance and the other part is saved. The savings are invested to accumulate interest. The payment of premiums can also be flexible and allows the policyholder to choose the premium payment amount from a wide range.


Policy Details


Death Benefit

The death benefit is also known as the face value is the lump sum of money the insurance company agrees to provide to the beneficiaries recognized in the policy after the insured deceases. For example, if the insured designated children as beneficiaries, then the receivers of this amount are the deceased’s children. The insured decides the death benefit amount and chooses a plan that will suit the financial needs of the beneficiaries. Afterward, the insurance company determines whether the insurer qualifies for insurance and matches the age, health, and other criteria.


A premium is the amount of money decided by both; insurance company representative and the insured or policyholder. Premium if paid according to the agreement made by both parties deems the insured eligible for life insurance, after death. Premiums are dependent on the size of the insurance policy; for larger death benefits, the premiums are higher.

Cash Value

The cash value refers to two things. Firstly, it is the insured’s savings account, from where payments are made. The money can be withdrawn from this account by the insured and the cash is accumulated while the process is tax-deferred.

Secondly, the policyholder can also use this amount to pay for premiums, purchase more insurance plans, etc. Depending on rules set by some insurance companies, if the cash value decreases, the death benefit may also decrease.

As you’ve just read, all the insurance policies available in the market have their pros and cons. At Yellowbrick Financial, we help you decide which insurance policy is suitable for you. We make sure you have an insurance policy that provides suitable coverage because the last thing you would want is to burden your family in the event of your passing. Getting more informed and educated before investing will help you make the right decision!