How Does Life Insurance Work & What Does it Cover?

You insure your car, home and your health to protect yourself from the unexpected. Have you considered how you can help financially protect those you love if you pass away? When you purchase a life insurance policy, you pay premiums to your insurance company, and in return, they will pay your beneficiaries a death benefit — which is an agreed upon sum of money — if you pass away while the policy is in effect.

Life insurance is meant to help provide for your loved ones after you’ve passed away. It pays a death benefit, or set amount of money — which is generally income tax free — to your beneficiaries, and then it terminates. This money can be used for anything, including things like:

• College tuition
• Paying off a car loan
• Replacing lost income
• Medical bills

Yes, American Family Life Insurance Company’s life insurance will cover accidental death.

Yes, life insurance will cover natural death. This includes death from old age and from illness, as long as the policy is still active.

In most states, if the cause of death is suicide within the first two years of the policy issue date, then typically beneficiaries are paid no more than the amount of all premiums paid. Some states have a shorter period. See your policy for additional details.

If you have a DreamSecure Whole Life Insurance policy with American Family Life Insurance Company and live to the age of 121, you would reach what’s known as your policy’s age of maturity.*** This means that you’ve “outlived” your life insurance. You’ll receive a life insurance payout equal to the amount of the policy’s surrender value and the policy will terminate. You could also choose to extend the maturity date and keep the policy coverage.

Having a life insurance policy can be a great way to help protect your loved ones after you pass away. Buying a life insurance policy is a big step toward helping to secure your loved ones’ financial futures. It can help pay for anything, including final expenses and medical bills, and it can help replace some income should an earner pass away.

Once you choose a type of life insurance and amount, you’ll need to connect with your agent to complete an application, which covers things like your medical and financial information. Keep in mind that it may take a few days to weeks before you get your policy after applying if you’re approved. Make sure to be honest, thorough and detailed in order to keep the process moving smoothly.

You may also have to complete a telephone interview and an in-person health check, depending on the type of policy, coverage amount and your health history. You can learn more about how to buy life insurance here.