Term vs. Whole Life Insurance: Which Do You Need?

Life is always changing – which is why it’s important to review your insurance needs and make sure your coverage is keeping up with your life. Whether you’re entering adulthood or nearing retirement, you may have a need for life insurance… but understanding which policy is best for you can be confusing. Let’s talk term and whole life insurance to help you find which benefits you the most, at any stage of life.

TERM LIFE INSURANCE

Term life insurance provides coverage for a specific number of years and you select the “term”. It’s an easy, more affordable option if you’re not looking for lifelong coverage. But, if you should change your mind, during your policy term you usually have the option to renew it or perhaps convert it into a permanent life plan.

At Erie Insurance, we offer two term life insurance plans including an easy-to-purchase option and level term insurance. An ERIE agent can help you decide which option is best for your situation.

Some general things to know about term life insurance:

  • You have the option of choosing how long and how much
  • Plans usually come in 5, 10, 15, 20 or 30 year packages
  • It is often more affordable than other life insurance options
  • Some policies come with an option to convert to permanent
  • It only pays if you perish during the period of the policy

When would I need term life insurance?

In your 20s: There are reasons to consider life insurance protection at a young age. Your rates will be less expensive because insurers price policies based on risk and young people have a far lower mortality rate than older groups. College and credit card debt could be one expense you want to cover. According to Debt.org, the average student debt is over $37,000.  A term policy can help relieve the burden of college loan payments away from your co-signer or family.

In your 30s and 40s: A new house, spouse and growing family are just a few reasons to consider a term life policy. While the best approach is often a blend of term and whole life insurance – that provides lifelong coverage and builds cash value – term policies can help cover the basic expenses if the unexpected does occur.

Whether you’re a fresh-out-of-college grad, a home owner, newly married or just had your first child, here are a few reasons why you might need a term life policy:

  • Funeral costs – From funeral planning to cemetery arrangements and proper permits, a funeral can cost up to $8,755. A term life insurance plan helps cover those costs so your family and loved ones don’t have to.
  • Income protection – Consider how much money your family would need without your paycheck in the picture. A term policy can help cover rent, utilities, groceries, car payments or childcare expenses so your family can maintain their lifestyle to the comfort they are used to.
  • Mortgage protection – Having life insurance in place can allow your family’s story to continue in the home they know and love.
  • Child starter plan – Purchasing life insurance when your children are young means they’ll be able to have life insurance when they need it most – even if there are health problems that run in your family. Once in place, their rate won’t go up and they’ll also have the option to exchange their term policy into a permanent cash value policy later in life.

WHOLE LIFE INSURANCE

Whole Life Insurance, also called permanent life insurance, is designed to last your lifetime. That means your family and beneficiaries are covered for the duration of your life*.  In addition to providing financial protection, whole life policies build cash value which allows you an opportunity to build your wealth.

Some things to know about whole life insurance:

  • Provides coverage for your entire life
  • Accumulates cash value
  • Premiums and coverage are guaranteed to remain the same for your lifetime

When would I need whole life insurance?

In your 30s and 40s: While a term life plan can be a great to start for life insurance protection, the best approach is often a blend of term and permanent life insurance that provides lifelong coverage and builds cash value. Whole life insurance can be used to cover the same expenses as term – like funeral costs, income replacement and mortgage protection, for example. Your ERIE agent can guide you in deciding when to choose whole life instead of term and how much to purchase.

50s and up: At this stage of life, you may have entered the “sandwich generation” meaning you might care for elderly parents while financially supporting college students or young-adult children. Inadequate protection could put both groups of family members at risk. At the same time, retirement savings might not stretch as far as expected after factoring in taxes, inflation and less-than-stellar investment returns. With a whole life policy you can borrow against your policy cash value as well as use it to supplement your income during your retirement years. Talk to an Erie Insurance agent about how whole life fits into your overall financial plan. 

No better time than now
Learn more about the life coverage that fits best with your life by talking with a professional, like an Erie Insurance agent. Together you can find the policy that provides peace of mind and the perfect protection for you, and your family.

*The guaranteed death benefit can expire if no premiums are paid following initial premium, or if subsequent premiums are insufficient or if account value is reduced by withdrawal or loan.

Insure your LOVE. Life Insurance for Stay-at-Home Parents

Life insurance isn’t for the people who die. It’s for the people who live.

If you never thought a stay-at-home parent needed life insurance, you might want to think again.

That’s because in addition to being full-time caregivers, stay-at-home parents are often also cooks, housekeepers, tutors, psychologists, chauffeurs, nurses and more. That’s a lot of responsibilities that often demands life insurance protection.

According to the U.S. Census Bureau, one in five primary caregivers for preschool age children is a man. Recent economic trends that saw big layoffs in traditionally male sectors such as construction, finance and manufacturing only ushered along that trend.

Regardless of whether it’s a mom or a dad, stay-at-home parents add to a family’s bottom line in a big way. According to salary.com, stay-at-home parents work an average of 92 hours per week and contribute a salary of $143,102 to the family.

Another cost stay-at-home parents often assume is caring for elderly relatives as well as young children. Pew Research reports that one in seven adults falls into this “sandwich generation.”

This list makes it easier to see the hole a stay-at-home parent’s premature passing would present. In addition to footing the bill for the mortgage, car and credit card and funding any college and retirement funds, the surviving spouse will likely need to pay for more childcare, buy more prepared meals and hire more household help.

“If there’s no money, there are no options,” says Greg Wieser, business initiatives leader, Strategic Marketing. “A family might have to split up, look at nursing homes if there are elderly relatives in the picture, sell possessions, drastically cut expenses and/or move to a less expensive house in a different school district. These are painful realities to confront during an already trying time.”

Luckily, even a small amount of life insurance can help in these sorts of situations—so no excuses about not being able to buy a big policy.

So now that you know a stay-at-home parent needs coverage, how do you figure out how much is needed for how long? Start simple by considering the four L.I.F.E. questions:

Liabilities. What’s your total debt?
Income. What will your income needs be—and how long do you need that income?
Funeral. Figure $8,000 for a very simple service.
Education. How much do you want to contribute toward your children’s education?

While no policy can replace a parent, it can help your family in a big way if the unthinkable happens. Your ERIE Agent can help you get an accurate picture of your family’s needs and which coverage would work best.

Easy, affordable life insurance for stay-at-home parents
term life policy that provides coverage for a set number of years is usually the best bet for stay-at-home parents. That’s because it’s ideal for handling expenses during the high-cost childrearing years in a more cost-effective way than a whole life policy.

A great term life option for stay-at-home parents is a term life policy from Erie Family Life, a product that lets you easily and affordably get $90,000 worth of term life coverage – without a medical exam.*

Applying for an Erie Family Life term policy is easy. Instead of a physical exam, there’s just a simple application that asks a few medical questions. All told, most people can get approval in as little as 15 minutes.

Connect with an insurance professional like an ERIE Agent to discuss life insurance that fits your needs and budget.

ERIE® life insurance products and services are provided by Erie Family Life Insurance Company (home office: Erie, Pennsylvania) and are not available in New York. Additional terms, conditions, exclusions, licensure and territory information are available at erieinsurance.com/life. The insurance products and rates described in this letter are in effect as of July 2013 and may be changed at any time. Eligibility for insurance coverage will be determined at the time of application, based upon applicable underwriting guidelines and rules in effect at that time.

*Issuance of policy is dependent on answers to medical questions.

Life Happens is a nonprofit organization dedicated to helping consumers take personal financial responsibility through the ownership of life insurance and related products. Life Happens Pro furthers its mission of educating the public by making its resources customizable and putting them directly into the hands of agents.

Life is Beautiful

Life is Ever-changing

Beauty brightens every season of life…whether you’re just starting out, growing your family or slowing down. Erie Family Life Insurance Company is there to help you secure the future, so you can relax and cherish every moment.

Term Life Insurance

One of the most beautiful things about life is that it’s always changing. Term life insurance can cover those you love through all of the stages. And it may be more affordable than you think. Did you know a healthy 35-year-old man would pay less than $18 a month for a 20-year, $250,000 term policy?

With term life insurance from Erie Family Life, you choose how long your life insurance lasts and how much coverage you want. The way it works is simple, if you should perish during
the term of your policy, it pays the beneficiaries; and if not, you may renew the term policy annually. Your policy also allows you to convert it to a permanent life plan during the term period you selected.

A term life policy from Erie Family Life features:
• Choice of 10-, 15-, 20- or 30-year plans.
• Rates that stay the same for the period of time you select.
• A simple application process.
• The option to convert to permanent insurance.
• Protection backed by a financially secure company.
• Personal service from your own local agent.

 

For more information on term life insurance, click here to download our booklet.

What You Need to Know About Snow Tires

Before the first snow falls, you’ll want to freshen up your car emergency kit, check the antifreeze and throw in that bag of kitty litter in case you need a little extra traction.

And speaking of traction: How are your tires?

If you think your tires aren’t up to the job of winter driving, it’s time to swap them for a set of snow tires. Here’s what you need to know.

HOW DO SNOW TIRES WORK?

Winter brings some of the most difficult driving conditions including slush, black ice and snow. Unlike regular tires, snow tires were created to endure these harsh conditions. Snow tires have a deep tread and special pattern that provides extra grip and traction. The design packs the snow while they’re moving to avoid slipping.

Related: Here’s what to do if you get stuck driving in a whiteout

While they are great at withstanding snow, they are even better with weathering the cold. A snow tire’s rubber formula allows them to remain flexible, even at the lowest of temperatures, which helps ensure optimal performance in snow and ice. This is especially helpful when you’re trying to slow down or stop on an icy road.

Tread depth, pattern and tire compound are three things you’ll want to consider if your car needs snow tires.

DOES MY CAR NEED SNOW TIRES?

If you live in an area where snow and ice are a frequent reality through the winter, snow tires can make driving easier and a lot safer. That’s especially true if you have a steep driveway or often drive on unplowed roads.

Related: Whoa: Here’s what road salt can actually do to your car

Parents of teen drivers can also find peace of mind knowing that the family car is equipped with reliable winter tires. (Learn more about auto insurance for teen drivers.)

If you live in an area where it doesn’t snow very much, you might be better off without snow tires. That’s because snow tires are made from softer compounds than regular tires – so if you’re driving on regular pavement that isn’t covered with snow, they are likely to wear out faster and be noisier on the road.

One more factor to consider is your car’s drive. Depending on your vehicle, snow tires might be more beneficial to its performance in snow.

  • FWD (Front-Wheel Drive): Heavy snowfall and icy roads sometimes make it harder for a FWD vehicle to stop as quickly. Adding winter tires will help improve your vehicle’s braking system in winter conditions. These cars handle better on slippery conditions than their rear-wheel drive counterparts, and usually provide better tire traction because the weight of the engine is over the drive wheels.
  • AWD (All-Wheel Drive): These vehicles have a definite advantage in winter conditions. Experts recommend them for drivers living in areas with heavy snowfall because they provide more control on slick surfaces. Winter tires can help your AWD vehicle’s ability to stop on icy roads.
  • 4WD (Four-Wheel Drive): This option is typically found in trucks and SUVs and is reliable for driving in deep snow or areas that don’t get plowed regularly. As with AWD vehicles, snow tires can come in handy to provide more traction on slick, icy roads.
  • RWD (Rear-Wheel Drive): While in the minority, this drive usually doesn’t do well in slippery conditions. Most of the weight of the car is in the front, which means less weight is on the drive wheels. The drive wheels won’t have enough weight on them to maintain their traction, which could result in sliding sideways on slippery roads. Cars with this drive could benefit from winter tires.

Regardless of what’s in your garage, remember that while a car’s drive supplies torque and power – only tires provide traction. That’s what makes all the difference as soon as you hit the brakes.

DO I NEED TO CHANGE ALL FOUR OF MY TIRES?

You may have heard of some drivers only buying two tires, such as two front tires for a front-wheel drive car. When driving in the snow, you want all four of your tires gripping the road… not just two. When it comes time to switch over to your snow tires, changing all four tires will give you the best control and stability when stopping or turning on a snowy or icy road.

Wondering what else you’ve gotten wrong? Check out this list of 7 debunked winter driving myths.

ARE THERE ANY ALTERNATIVES TO SNOW TIRES?

If snow tires aren’t what you’re looking for, here are a few different traction devices. Before you invest in any one, it’s important to review the laws in your local area. Some alternatives – like chains – may be prohibited.

  • All-Season Tires: Changing tires from season to season can be a nuisance. All-season tires provide reliable performance in most weather conditions. However, they don’t perform quite as well as winter tires when weather becomes more severe. In Consumer Reports’ tests, snow tires outperform all-season tires in heavy snow and ice.
  • Studded Tires: Studded tires are fitted with lightweight metal studs and are more adept at gaining traction on ice. When the road is clear of snow and ice, however, the studs can often damage the road. They can also be very loud and are outlawed in many states.
  • Tire Chains or Cables: Metal chains wrapped across tires can provide additional traction, but legality varies widely. Many states have outlawed chains because of the damage they do to roads, while other regions experiencing treacherous snowfall and ice make them mandatory. Either way, tire chains are not recommended for high-speed travel. If you’re considering chains, first make sure they are legal in your area. Then make sure you understand their recommended speed limit and whether that limit will work with your driving style.
  • Tire Socks: As an alternative to chains, reusable snow socks pull over the wheel like a pillow cover to form a tight fit once they are strapped down. The socks get their grip from specially designed textiles and from the friction the spinning wheel causes. Snow socks exist for all tire sizes, making them a versatile option.

WHEN SHOULD I GET SNOW TIRES?

Fall is a great time to begin shopping for winter tires. You’ll want them on your vehicle before the snow starts to fly. Consider installing them when the temperature drops to a steady 45 degrees Fahrenheit or below.

Make sure your vehicle is ready for winter – and that includes a checkup of your auto insurance policy. At Erie Insurance, our local agents can answer your questions, help you with a quote and help you get the right coverage for your needs and budget.

Choosing Your Medicare Supplement Plan

We’re here to help. Simple solutions from people you trust.

 

Health care and out-of-pocket costs for Medicare participants are on the rise, making the need for supplemental insurance even greater.1 With the advice of your ERIE agent, selecting a Medicare Supplement plan can help alleviate some of those costs.

ERIE offers several supplemental plans2 designed to meet your needs and fit your budget. Our agents are standing by; ready to answer your questions and provide the information you need to make your decision.

As always, we’ll be there when you need us. That’s our promise of service.

 

 

 

1. The Henry J. Kaiser Family Foundation report on Medicare beneficiaries’ out-of-pocket health care spending.
2. These plans are not connected with or endorsed by the U.S. government or the federal Medicare program.
This is a solicitation of insurance. An agent (or the company) may contact you.
ERIE® life and health insurance products and services are provided by Erie Family Life Insurance Company. The policy has terms, limitations and exclusions under which the policy may be continued in force or discontinued. For costs, complete details and licensure information, contact an ERIE agent. Eligibility for insurance coverage will be determined at the time of application, based upon applicable underwriting guidelines and rules in effect at that time. In some states, Medicare Supplement policies are available to disabled individuals under the age of 65. Not all plans are available in all states and not all ERIE agents offer Medicare Supplement insurance. Medicare Supplement insurance is not available in the District of Columbia, New York and Wisconsin. Life insurance is not available in New York.