Life Insurance Quick Tips

1. Understand what types of life insurance are available. Typically, you’ll hear about term life insurance and universal life insurance (sometimes referred to as permanent insurance). Term life insurance typically doesn’t cost as much as universal life insurance. Both types of coverage may be available through your employer’s benefit package and would be a valuable financial resource for your loved ones if you were to pass away

2. Determine how much life insurance you need. It’s a common question that leaves many people frozen in the decision making process. Each person’s needs and responsibilities are different. So, how much will depend on your personal situation. For fast answers, CIGNA offers an insurance calculator online for a general assessment. Current policyholders should also review the amount of life insurance they own after each life changing event. A new child means college tuition in 18 years.

3. Consider buying life insurance for a spouse or child. While this can seem like an unwelcome consideration, as no one ever wants to consider the loss of a loved one, make sure you have enough insurance to pay for funeral expenses and even replace a loss of income.

Funeral expenses cost on average $10,000 and as much as $20,000. Funeral homes expect to be paid quickly and some want to be paid upfront. Worrying about the bill is another challenge a grieving family member doesn’t need. Meanwhile, some families might rely on a spouse's income. Again, revisit how much life insurance you have after each big event in your life. Beyond just funeral expenses, the family left behind may need life insurance to help pay bills, maintain daily living expenses or even cover a mortgage or pay for a child’s college tuition.

4. Know your plan and what benefits are available. Employers can offer a variety of different policies, and each offer different options. Some policyholders who suffer from a disability might quality for a waiver of life insurance premiums. For policyholders who become ill and are given a prognosis of a year or less to live, they might qualify for terminal illness benefits, where they can receive a portion of life insurance upfront to help pay medical bills. Some policies allow policyholders to borrow against life insurance to help pay for a new house or other big event.

5. Update your coverage amount and beneficiaries after every major event in your life such as a marriage, divorce, or the birth of a child. Delaying will only lead to forgetting. If the unexpected should happen, the policy’s proceeds will be distributed as written.

Also, keep your Will up to date so you can be certain your wealth is distributed as you intend. CIGNA's web-based Will Preparation tool allows employees to build a will and other important legal documents online and is just one of the services available to employees with access to CIGNA life, accident, and disability policies at no additional cost to you.