This information is designed to answer some of the general questions you may have. If you currently have a life insurance policy, we hope you will review this information. Please note, however, this is not part of your life insurance policy. For questions or changes to your policy, contact your Illinois Mutual agent or our Policy Service Department at 1-800-380-6688, ext. 759 or email us.
What is life insurance?
Life insurance is the means of providing the necessary financial resources to your loved ones in the event of your death. These proceeds can help your family stay in their home, pay for funeral expenses, provide financial security while your family is growing and provide needed dollars for a college or vocational education and business continuation needs. Certain types of life insurance policies may also provide cash value while you are living.
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Why do I need life insurance?
Your most valuable asset is your ability to earn an income. If you have any situation where others are dependent on your ability to earn an income, then you need life insurance. These could include a spouse, children, parents, a unique family need or a business.
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How much life insurance do I need?
The answer isn't really how much life insurance you need ... it's how much investment capital your family will need at the time of your death. Their need for capital, on a gross basis, is really a function of two variables:
- How much will be needed at death to meet immediate obligations (such as mortgage or other debts)?
- How much future income is needed to sustain the household?
To determine how much, if any, life insurance you need, start by gathering all your personal financial information and estimating what your family will need after you're gone. Include ongoing expenses (such as day care, tuition, or retirement) and immediate expenses at the time of death like medical bills, burial costs, and estate taxes. Your family also may need funds to help them readjust: perhaps to finance a move, or pay expenses while job hunting.
The Life Needs Analysis Calculator helps you make a preliminary assessment of your family's financial needs once you have passed away, estimating for you the amount of life insurance you will need to cover the expenses that your family will not be able to pay by themselves.
There are dangers associated with underestimating the amount of life insurance you'll need. If you have inadequate life insurance, your survivors may be unable to maintain their current standard of living. In more extreme cases, your family may find it difficult to cover your funeral and other expenses that may arise as a result of your death.
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What types of life insurance policies are available?
There are two general categories of life insurance: term and permanent.
Term insurance is life insurance that pays a death benefit during a specific period of time, such as 10 years. At the end of the term period, there is no insurance in force unless you renew the insurance for another term period. You can renew term insurance policies for another term period even if your health has changed. The premium rates increase at each renewal date. Term insurance generally offers more insurance protection for your premium dollars; however, as stated above, premiums increase at the end of the term period. It is good protection for needs that will disappear in time, such as mortgages or car loans.
Permanent insurance, also referred to as cash value insurance, provides protection for life. As long as you pay the premiums, the death benefit will be paid. Premiums are generally higher than term insurance; however, part of the premium is invested by the company and builds up a cash value. This cash value will accumulate and may be available if you surrender the policy; or, if you stop paying premiums, you can use the cash value to continue your policy at the current death benefit for a specified time or at a lesser death benefit covering you for your lifetime. Part of the cash value may also be used as collateral for a loan, or you may borrow from the cash value of the policy.
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What types of term life insurance does Illinois Mutual offer?
Illinois Mutual offers Term Life for periods of 10, 15, 20 and 30 years. Generally, term insurance does not build up a cash value. However, Illinois Mutual offers Return of Premium Term (not approved in all states), which will allow you to receive 100 percent of the premiums paid including the rider premium at the end of the term period and a partial premium return beginning at the end of the fifth policy year.
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What types of permanent life insurance does Illinois Mutual offer?
Illinois Mutual offers different types of Permanent Life insurance: Whole Life , Mature Market Life and Universal Life .
Whole Life is the most common type of permanent insurance. The premiums generally remain level for the life of the policy.
Mature Market Life helps you manage your assets and estate.
Universal Life is designed to provide flexibility throughout the lifetime of the insured. Within certain limits, the owner of a Universal Life policy can choose the death benefit and premium amounts and can change these amounts after the policy is in force.
The basic minimum premium is the smallest premium amount that can be paid during the first years the policy is in force, as specified by the policy. After this period has been satisfied, the policy becomes versatile and can more easily be changed to fit your current circumstances.
The cash value is the amount of accumulated value in your policy. It is the premium paid, minus the cost of insurance, plus interest. The cost of insurance consists of mortality charges, expense charges and policy fees. The surrender value is the cash value minus the surrender charge. This is the amount payable to you if you surrender your policy.
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Can I convert my term policy to permanent insurance?
All term policies have a conversion option. Please contact your agent or Policy Service when you want to make the change.
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Does my policy earn dividends?
All policies contain a dividend provision. Dividends will be paid on policy forms at the discretion of the Board of Directors.
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Can I secure my policy as collateral for a loan?
The Policy Service Department will provide you with the form necessary to assign your policy as collateral for a loan.
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How does my beneficiary collect the benefits on my life insurance policy?
Your beneficiary or your agent should contact Illinois Mutual at (800) 437-7355, ext. 746 or email us, at the time of death. We will then send the forms needed to process the claim.
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