A Helpful Guide to Buying Life Insurance

If you have a family or elderly parents who depend on you for financial support, buying life insurance to provide them with a safety net and stability is a responsible move. It’s also a good idea to buy life insurance if you have any co-signed debt, like student loans or a mortgage, that will transfer over to another person if you pass away.

But where do you begin with buying life insurance? What’s affecting rates right now? When is the best time to buy? Is COVID-19 playing a role in rates and how much you’ll pay? These questions and more like them are valid, especially when this is your first time looking into purchasing this coverage.

To better understand life insurance and what you need, we’ve created a helpful guide to buying life insurance, including local coverage like Dayville Life Insurance from Byrnes Agency.

How Does Life Insurance Work?

You pay a monthly amount at its most basic level, called a premium, when you buy life insurance in exchange for the insurance contract or policy. This names your beneficiaries who will receive a payment from the insurance company if you pass away before the end of the term. Life insurance benefits are paid out in full, are tax-free, and paid in one lump sum. This payout can help your family stay in their home and cover living costs while adjusting to life without you.

These costs might include paying rent or mortgage, paying for childcare or other domestic help, future expenses for children, and providing financial support for a partner. The money can also pay for estate taxes that a family must pay to inherit assets or settle any unpaid medical bills, taxes, or debts.

What Types of Life Insurance Are Available?

There are different life insurance products available to you from your local Dayville Life Insurance provider, Byrnes Agency. They usually break down into two main categories: term and cash value.

Term policies are a popular selection for many Americans because they are pure insurance. They have low monthly payments and have an easy structure to follow that pays out if you should pass away within your coverage term limit. Term policies can usually cover you for durations of 10 years and up to 40 years.

Cash-value policies, or whole-life, are more complicated because they involve both term-life-type coverage and an additional investment component. They are typically more expensive than term policies for an equivalent amount of insurance coverage. These kinds of policies last as long as you continue making payments so that they can endure the rest of your life.

Payment for whole-life coverage can vary dramatically based on underlying investment performance as well as the cost of insurance involved. Some people don’t mind paying higher monthly fees for a whole-term policy and prefer a bundled product.

Length of Insurance Coverage

Life insurance is meant to either last a particular period or the course of your life, as mentioned above. If you only need coverage for a set period, such as when your kids are growing up, consider term coverage. If you need life insurance for as long as you’re alive, covering your extended family and income replacement, consider permanent or whole-life coverage. 

Think About Your Goals

Some permanent life insurance policies can step in as a savings plan. Permanent life insurance policies are just that, permanent, and have a cash value that will grow over time. These policies contain a death benefit, which is the amount of money paid at death, and a cash value that builds over time on a tax-deferred basis, similar to retirement or savings plans.

Name Beneficiaries

Your life insurance beneficiary or beneficiaries are those who will receive the proceeds of your life insurance policy. When choosing the beneficiary, avoid naming those under the age of 18 as they will not receive the funds right away, or your estate as it could have tax implications. If the policy is to benefit your business, you may want to have a formal plan for how the payouts should be used. Explore your best policy options for choosing a beneficiary by working with your local life insurance agent.

About Byrnes Agency

At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

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Dayville Office

Phone: (860) 774-8549

394 Lake Rd

Dayville, CT 06241

United States


Hours of Operation: Monday- Friday 9:00am-5:00pm

Norwich Office

Phone: (860) 886-5498

6 Consumers Avenue

Norwich, CT 06360

United States


Hours of Operation: Monday- Friday 9:00am-5:00p