Life insurance can help financially protect your beneficiaries upon your death. If you suddenly pass away, they'll receive a death benefit as long as you’ve kept up on premium payments, abide by the policy terms and your policy is still active. Let’s dive deeper into how life insurance works and what it covers.
Put simply, life insurance is a contract between you, the policyholder, and a life insurance company. You make regular premium payments and follow the terms within the plan, and the company provides your beneficiaries with a death benefit or payout when you pass away. While term life insurance applies for a certain time period, like 10, 20, or 30 years, permanent life insurance typically offers indefinite coverage as well as a cash value component.1
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Here’s an overview of some common features life insurance policies offer:2
A death benefit payout is usually a lump sum of money your beneficiaries receive after you die. They typically can use these funds in any way they’d like.
Cash value comes with permanent life insurance policies such as whole and universal life insurance. It’s essentially a tax-deferred savings account that grows over time.
Riders can allow you to access your death benefit while you’re still living in certain situations. You may use them to help cover expenses related to a terminal illness, hospice or nursing home care, or anything else. Aflac offers several riders that can be added to many life insurance policies, such as the accelerated-death benefit rider* and waiver of premium rider.
Life insurance usually provides coverage for deaths that result from:
Your beneficiaries can use the death benefit they receive from your policy to help cover the following:3
Life insurance doesn’t typically pay out in these circumstances:4
The amount of time life insurance pays out depends on your life insurance company. However, many providers pay out within 60 days of when beneficiaries file a death claim. Delays may occur if there’s a lapse in your policy, fraud is suspected, or your cause of death is excluded.5
Life insurance can make your loved ones' lives easier after you pass away. Having a policy can help give you peace of mind knowing that they can be financially protected. If you’re interested in getting life insurance, Aflac offers a variety of life insurance policies that are worth exploring. Start chatting with an agent to learn more about your options and get a quote today.
Explore your life insurance options.
*Receipt of accelerated death benefits may affect eligibility for public assistance programs. Benefits may also be taxable, and are not expected to receive the same favorable tax treatment as other types of accelerated death benefits that may be available.
1 Nerdwallet - What Is Life Insurance and How Does It Work?. Updated August 31, 2022. https://www.nerdwallet.com/article/insurance/how-does-life-insurance-work. Accessed April 5, 2023.
2 Policygenius - How Does Life Insurance Work. Updated March 30, 2023. https://www.policygenius.com/life-insurance/how-does-life-insurance-work/. Accessed April 5, 2023.
3 Bankrate - What Does Life Insurance Cover. Updated March 13, 2023. https://www.bankrate.com/insurance/life-insurance/what-does-life-insurance-cover/. Accessed April 5, 2023.
4 Policygenius – What Kinds of Death Are Not Covered by Life Insurance? Updated March 9, 2023. https://www.policygenius.com/life-insurance/what-kinds-of-deaths-are-not-covered-by-term-life-insurance/. Accessed April 12, 2023.
5 Policygenius - How Long Does It Take to Get a Life Insurance Payout? Updated February 4, 2023. https://www.policygenius.com/life-insurance/how-quickly-do-life-insurance-companies-pay-out-death-claims/. Accessed April 5, 2023.
Life – 68000 Series - In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400. Term/Whole Life – B60000 Series – In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Group Whole Life - Q60000 Series - In Arkansas, Policy Q60100CAR. In Delaware, Policy Q60200M. In Idaho Policy Q60100CID. In Oklahoma, Policy Q60100COK. In Oregon, Policy Q60100COR. In Texas, Policy Q60100CTX. Group Term Life Q60000 Series - In Delaware, Policies Q60200C. In Arkansas, Idaho, Oklahoma, Oregon, Texas, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C.
The content herein is provided for general informational purposes and is not provided as tax, legal, health or financial advice for any person or for any specific situation. Employers, employees and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac insurance coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage underwritten by American Family Life Assurance Company of New York.
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