Insurance

Life insurance is purchased for a number of reasons, but the most important is that life insurance provides financial protection to the person receiving your insurance proceeds, following your death.

When buying life insurance, it is important that you understand what your life insurance needs are, such as to provide your family with the amount of cash they will need immediately following your death to give them some time to adjust to the change in the family’s financial circumstances. The amount of life insurance you buy will depend upon your financial resources and situation.

The basic life insurance include:

• Term insurance, which provides coverage for a specified period of time and pays your beneficiary only if you should die during the term of the policy.
• Whole life insurance, which provides insurance coverage for your entire life. Whole life policies also may have a savings element in the cash value account. If you find that there is no longer a critical need for the insurance, the policy may be surrendered or canceled and the amount in the cash value account may be returned to you to use for other purposes.
• Endowment insurance, which pays you, the insured, a designated amount of money if you are still living after a specified number of years. If you should die before that time, your beneficiary will receive the proceeds of the endowment policy.
• Universal life insurance, which provides coverages for your lifetime. Premiums and death benefits are flexible according to the terms of the policy. There is also a provision for cash value accumulation on the policy.
• Variable life insurance, which also provides lifetime coverage. Premiums may be fixed or flexible according to the terms of the policy. There is an element of investment in the cash value account of the policy and separate accounts under stocks, bonds, money markets or other funds may be established. Death benefits and cash value accounts may differ according to the performance of the invested funds.

Here are some tips on buying life insurance:

• Buy your life insurance from a company that is licensed in Hawaii. Shop around and compare different policies and their costs.
• Don’t be talked into buying more insurance than you need or can realistically afford.
• Read your policy carefully after you receive it. If there are any points you do not understand ask the insurance agent to explain. If you change your mind after purchasing a life insurance policy, you may return the policy within ten days of receiving it, for a full refund of the premium paid.
• Let your beneficiaries know what kinds of insurance you own and the amount in the policies, as well as where the policies are kept.
• Re-evaluate your insurance needs from time to time to determine whether your life insurance coverage is adequate.