Talking about life insurance isn’t exactly fun. In fact, it can be scary to think about the unexpected. But planning ahead can help give you added peace of mind.
It’s more important than ever to consider the security of those who rely on you, and what their lives would look like without you. Life insurance coverage which may include plans such as term life, level premium term and variable universal life can help provide your loved ones the money they may need to pay their bills and fulfill their dreams after you’re no longer around.
To make taking this important step easier, we made a list of everything you always wanted to know about helping to protect your loved ones with life insurance, but may have been too afraid to ask.
How much life insurance coverage might I need?
A common rule of thumb for determining how much life insurance you need is to multiply your salary by 10. Depending on your situation, some financial advisors recommend multiplying it by 5 or 7.1
Isn’t my employer’s life insurance benefit enough?
Compare your life insurance coverage needs to what your employer offers. Chances are, the coverage amount you have through your employer may not be enough. Also take into account that unlike many employer plans, an AICPA-endorsed Life Insurance Plan is yours to take with you even if you change jobs, as long as you maintain your membership.
What type of insurance should I buy?
The type of life insurance plan that’s right for you has a lot to do with where you are in life as well as your financial goals and responsibilities.
Term life insurance is typically a more affordable and straightforward type of plan. Level premium term plans offer rates that stay the same for a set period of time, making it a great plan for those who wish to help protect their families until the mortgage is paid off or children graduate college.
Variable universal life insurance features coverage with investment options, offering the opportunity to have life insurance protection and the potential to grow your money through accounts that offer stock and bond funds.
Can I afford the monthly premiums?
The earlier in life you purchase life insurance, the more affordable it can be. The CPA Life Plan costs $2/month for $100,000 in coverage for a 28-year-old male. That’s much less than what many spend on coffee per day.
In fact, the 2020 LIMRA Insurance Barometer Study showed that more than half of Americans incorrectly estimate the cost of a term life insurance policy at more than three times the actual cost.2 Using an online calculator can help you estimate your needs.
Can I be approved if I’m not in perfect health?
Although your health is a factor that many life insurance companies assess to determine what you will pay for coverage, it doesn’t always automatically disqualify you from getting life insurance. Medical Underwriting guidelines take into account many factors related to specific medical conditions. These factors include, but are not limited to, date of diagnosis, current treatment, prognosis, etc.
Why AICPA Member Insurance Programs Life Insurance?
We think your colleagues put it best: 99% of members would recommend the AICPA-endorsed Life insurance plan to their friends or colleagues!3
Can I select someone other than my spouse to receive the benefits after I am gone?
Yes, your beneficiary can be someone other than your spouse, as long as they have insurable interest. Insurable interest means the beneficiary would suffer a financial hardship or loss if you were to die (i.e. children and other blood or legal relatives, significant others, and business partners).
Do I have to take a medical exam and if yes, what can I expect?
In many cases, no exam is needed. In fact, some insurers now offer much shorter application processes and instant approval for those who qualify, bypassing the medical exam altogether. If you are asked to take one, it may include tests such as:
- Basic medical questions
- Height and weight measurements
- Blood pressure reading
- Collection of blood and urine samples
- Cardiac test
Talking about life insurance isn’t as daunting or scary as it sounds. In fact, the right life insurance plan can help give you peace of mind that your loved ones will have the financial support they may need when the unthinkable happens. It can also serve as an important part of your estate planning. AICPA Member Insurance Programs offers a variety of Life Insurance Plans and coverage amounts to help make your decision easier:
- CPA Life and Spouse Life offer an easy application process and many members say it’s the best value for their money.
- The Level Premium Term Plan offers coverage for members and their spouse with a fixed cost (level rates) for a period of time.
- Group Variable Universal Life offers a number of investment options, including a variety of stock and bond funds, and a fixed account.4
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For CPA and Spouse Life: If your coverage was issued prior to November 1, 2022, some of your current Plan details will differ and may be impacted if you apply to make changes. For example, certain impacted features could include but are not limited to rate class expiration and evidence of insurability requirements. Refer to your policy booklet and Certificate of Coverage or contact Aon for Plan details.
1 Forbes Advisor, How Much Life Insurance Do I Need?,
https://www.forbes.com/advisor/life-insurance/how-much-life-insurance-do-you-really-need/, Aug 2022
2 2020 LIMRA Insurance Barometer Study
3 Understanding AICPA Members’ Experience and Preference Research Study 2021, conducted among members who have the product.
4 The fixed-account guarantee is based on the claims-paying ability of the issuing company.
5 2021 LIMRA Insurance Barometer Study
This site may contain marketing language, on products issued by The Prudential Insurance Company of America, that has not yet been approved in all states.
This material is for informational or educational purposes. In providing this material, Prudential (i) is not acting as your fiduciary as defined by the Department of Labor and is not giving advice in a fiduciary capacity and (ii) is not undertaking to provide impartial investment advice as Prudential will receive compensation for its products and services.
You should consider the coverage and the underlying funds’ investment objectives, risks, charges and expenses carefully before investing. Both the GVUL prospectus and the underlying fund prospectuses contain this and other important information. Visit cpai.com/gvulprospectus for the prospectuses. You should read them carefully before purchasing coverage.
Aon Insurance Services is the brand name for the brokerage and program administration operations of Affinity Insurance Services, Inc. (TX 13695) (AR 100106022); in CA and MN, AIS Affinity Insurance Agency, Inc. (CA 0795465); in OK, AIS Affinity Insurance Services Inc.; in CA, Aon Affinity Insurance Services, Inc. (CA 0G94493), Aon Direct Insurance Administrators, and Berkely Insurance Agency; and in NY, AIS Affinity Insurance Agency. The Plan Agent of the AICPA Insurance Trust, Aon Insurance Services, is not affiliated with Prudential.
Group Insurance coverages and Group Variable Universal Life (GVUL) coverage are issued by The Prudential Insurance Company of America. GVUL is distributed through Prudential Investment Management Services, LLC. Both are Prudential Financial companies, Newark, NJ. The Booklet-Certificate contains all details, including any policy exclusions, limitations, and restrictions, which may apply. Contract Series 83500 & 89759. CA COA #1179, NAIC #68241.
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