How Much Do You Know About Life Insurance?

A life insurance policy pays out a sum of money upon your death to whomever you name as beneficiaries. As hard as this is to talk about, life insurance can help provide security for those who financially depend on you. You pay for this policy monthly, twice a year or annually, depending on the plan. Life insurance helps replace the income that you’ll no longer be able to provide, and can help pay for expenses such as your own funeral expenses or even your child’s college education. You decide how much insurance to purchase based on your family’s ability to be financially independent in the years to come.

You may be able to easily answer “yes” or “no” to this question, but do you know how much life insurance you actually have? If you only have life insurance through your current employer, do you know how much your policy covers, and what happens if you leave your job?

You may think you don’t need to worry about this right now. You’re too young. Or you’re healthy. But if people are financially dependent on you, it’s important to have a policy that can help keep them secure in the event of your loss. 

What you may not know is that NEA members have access to NEA Complimentary Life Insurance, a life insurance policy that’s available to eligible members at no cost. It just takes a few minutes to name your beneficiary, or beneficiaries, and secure this benefit for your loved ones. 

You also have access to a variety of NEA life and accident insurance options—plans open only to NEA members. Plans meant exclusively for educators like you.

“Death benefit” sounds so morbid, doesn’t it? But it’s a simple, yet important, term to know. All it means is the amount that’s paid upon the insured passing (and that’s you…). It’s up to your beneficiaries to decide how it’s used. The money can help in many ways: help pay for your burial, help pay off your mortgage and other bills, help pay for college tuition or pay off student loans and more. It’s meant to help take the financial stress—whatever form that takes—off of your family and make their lives easier.

You may THINK you know how much you need, but while it’s easy to guess, guesses are often wrong. You’ll probably either guess too high or too low. 

Did you know that you may need seven to 10 times your annual income? That’s typically way more than most school districts currently provide as a benefit. 

Everyone’s situation is different, however, so it’s best to start here, with this calculator, so you can figure out the right amount for your own family. 

Many people assume that this is a definite “yes.” And that you shouldn’t bother trying to get life insurance if you have a pre-existing medical condition. After all, the life insurance company wants to make sure you’re not a risk for them, right? 

While it’s true that if you’re young and healthy you could get a better deal and better coverage with a policy that requires a medical exam, it’s also a perfectly viable option to go the no-exam route to get coverage if you’re older or if you have conditions that make qualifying for a medically underwritten policy difficult.

As an NEA member, you have access to a couple of no-medical-exam options: the NEA^® Group Term Life Insurance Plan and the NEA^® Guaranteed Issue Life Insurance Plan. These plans don’t require a medical exam in the vast majority of cases. So you can help protect your family while not stressing out about your health issues. And once you’re covered, you don’t have to be concerned about losing your coverage as you get older or if your health status changes. It’s a win-win.

Watching this video may have raised more questions for you than providing answers. Many NEA members don’t know how much life insurance they need, what kind they need or even if they need life insurance at all. 

A common discovery is that a much higher life insurance amount is needed to adequately cover your family. 

Thinking about life insurance can be overwhelming. It’s an emotional issue as well as a financial one. Start with baby steps. As an NEA member, you already have NEA Complimentary Life Insurance. All you need to do is name your beneficiary, and hopefully you’ve learned the importance of naming your beneficiaries by this point. This coverage is an exclusive program for NEA members, and fully paid for by the NEA Members Insurance Trust and at no cost to you. 

Next, run your numbers and see how much life insurance you really need. Once you have that magic number, read about the different life insurance options available to you as an NEA member, or learn about your options by watching this video. If you get stuck, we’re happy to walk you through it. Chat with us or call us at 1-855-NEA-LIFE and we’ll help you figure it out.