This article explains the CMFG life insurance program in detail and highlights its benefits and advantages for policyholders.
Life insurance is generally a contract between an insurance provider and an insurance policyholder. According to the policy, as per this contract, an insurance company has to pay a particular sum of money to the insured’s family if he dies within the set duration. Life insurance is highly beneficial for people who have financially dependent family members or relatives that they have to provide for. Death is inevitable and unforeseen. A person can never know when his time in this world ends, so he has to ensure his family can easily spend their time with money from life insurance programs.
Life insurance policies provide financial stability to people after they lose a breadwinner to sudden death. Any insured individual can ensure financial aid to their family after their death with such insurance policies. Many insurance providers offer life insurance programs at affordable rates and comprehensive coverage. Among these insurers is the name of CMFG life insurance. Also known as CUNA Mutual Financial Group, CMFG was founded in 1935 and is headquartered in Wisconsin, United States.
Table of Contents
- 1 What is life insurance, and why is it necessary?
- 2 How do life insurance programs work and provide aid?
- 3 Life insurance: Basic terms, coverage, and costs
- 4 Who needs life insurance?
- 5 How much life insurance do you need?
- 6 What can life insurance provide you?
- 7 Conclusion
What is life insurance, and why is it necessary?
Death is a contingency that comes at unexpected times, and family cycles usually get disturbed with the untimely deaths of their beloved ones. Financial dependence is itself hard, but if the sole source winning the bread and butter of a family dies, they will not have anyone else to help them with the sudden financial crisis. It is always crucial to plan ahead of time in such situations, especially for families with growing children or elder parents.
Raising children or caring for ill parents is already a burden on people. If they die unexpectedly, this burden falls down to the remaining immediate family members. Every family is not able to meet their day-to-day expenses in such cases. So, financial aid is required, and insurance companies give this help. Although no amount of money can compensate for any human’s life, it certainly can provide monetary compensation.
This insurance is for people who fear dying too soon and for people who live a longer than average life. With aging comes health issues and a rising need for medical assistance. The Healthcare system is costly, and people cannot afford medical treatments without having insurance policies. Policyholders can ensure a better life through life insurance policies and improve health maintenance whenever required. This way, a life insurance program benefits both living and dead in different aspects. The dead can ensure better lives for their remaining family members, and living insured people can live a better life with good health access.
So, life insurance programs help their policyholders with financial aid on unforeseen events. Cuna Mutual Finance Group (CMFG) is a prominent name in the insurance market, and CMFG Life Insurance programs have helped policyholders with all their money-related issues. Life insurance policies are essential due to the following reasons:
- Protects family members and loved ones
- Builds inheritance of a person
- Pay off debts and loans
- Provides financial security
- Leads to a stress-free life
- Protects family members and beloved people
Usually, in most families, there is one person who earns his family’s bread and butter, and they depend on him for their livelihood. If a person dies due to some unexpected event, the entire family loses their earning source and is helpless. Families can continue their lives with the financial aid insurance companies provide every month with life insurance policies. Investing in life insurance plans is highly crucial for those parents who have growing children to support or live with their old parents, dependent on them for their day-to-day needs. A person can never be sure of how his family will live after him, so insurance policies are the right solution for such situations.
Depending upon your policy type, life insurance programs are reasonably affordable, and every person can get a suitable plan according to their financial status. After losing their income source, a family still has to deal with daily financial needs and requirements. These can be household tasks, including cleaning, laundry, cooking, childcare, and everything an average growing family needs. If a person suffers from a chronic medical situation, the healthcare costs are a separate burdensome addition. Life insurance plans protect a family from a financial crisis and help it live a normal life without economic dependence.
Your children’s education, your parents’ well-being, and if you live, your living expenses, all can go smoothly without worrying about money with life insurance. This is why life insurance programs can provide financial stability to your family and protect them from any unforeseen issues.
- Builds inheritance of a person
Every person wants to leave some financial inheritance for their family members when they leave this life. It is always good to secure your children’s life or your family’s life, in general, after you die. The inheritance you leave for your family helps them build their lives and live obstacle-free life. Moreover, inheritance is an excellent way to circulate wealth among generations and provide security for their future. Every person does not live a financially secure life, and once he, with his hard work, becomes stable in life, he wants his family to live a struggle-free life.
Everyone cannot leave assets and extensive property for their loved ones after their death. Still, they can build their inheritance as per their family status with life insurance policies and programs. Life insurance plans are a great way of setting a solid future for your kids and providing a stable life for your spouse and parents too. With this financial aid, you can deal with all the monetary needs of your loved ones even when you stop earning. This insurance does not come in handy only when a person dies. But, even after serving in a company or setting up your own business, a person can never be sure of constant financial stability.
- Pay off debts and loans
People usually take loans and debts that they have to pay off later for a better life. But if, due to some accidental situation, you die or are disabled and lose your income, how will you pay off your debts and loans? Life insurance plans can help you with this matter and can take care of your loans, if not entirely, then partially. The main thing that life insurance policies can help with is covering the everyday expenses and catering to their financial needs. The second major thing is its aid in dealing with debts, including car loans and other costs. After a sudden death, funeral and burial costs can wear a family’s budget down quite easily. In this matter, life insurance plans can rescue a person and his family from being dependent on others for their basic needs and requirements.
- Be financially secure
Life insurance programs increase the financial stability and security of the insured and his family members. A family consists of parents and their children, and parents want to ensure their children’s financial stability once they leave forever. They want a good education for their children and want to support them in the new journey they set off on, including marriage and building their careers. Life insurance programs with multiple policy types have and still are helping individuals increase their financial stability and provide for their children in the best possible ways. Life insurance programs lay down the foundation of a person’s economic life and, with time, build stability in it, benefiting the insured and people associated with him.
- Be stress-free and live peacefully
Life insurance acts as your backup plan in times of need and assists you financially whenever the need arises. A person can never know how long he will live and what things he will need in his life. So life insurance plans can help anyone live a peaceful and stress-free life by protecting them from uncertainties in life. Without a doubt, having life insurance coverage will bring you and your family peace of mind. After investing in life insurance policies, a person can live tension-free and not worry about unforeseen costly situations, including healthcare assistance and children’s care. Life insurance protects your heirs from the unknown and helps them through an otherwise difficult time after you die or are disabled due to an accident.
Thus, investing timely in life insurance policies can lead to a better standard of living and waive off any problematic situations that require financial stability. CMFG Life Insurance provides a variety of insurance programs and helps its clients and customers to ensure a better life for themselves and their family members.
How do life insurance programs work and provide aid?
Life insurance policies aid the insured in case of death and financially help him if he dies or gets involved in an accident that disables him during his policy duration. As a person grows old, builds his family, and invests in businesses, the need for life insurance programs increases. Life insurance was created primarily to aid widows and orphans in taking care of funerals and burial expenses. But according to a recent study, almost half of Americans have some sort of life insurance coverage. So the question that appears here is how does a life insurance policy work, and is it really affordable for all people?
Depending upon the policy type of life insurance, people can deal with costs related to natural deaths, accidental deaths, and some illnesses and injuries while the insured is still alive. Typically, there are two types of life insurance programs:
Term life insurance is cheaper with limited coverage, whereas a permanent life insurance program never expires. With time, it builds its cash value if the insured continues to pay premiums on a timely basis.
How does term life insurance work?
Term life insurance has a determined period in which it is applicable. This duration is set at the time of the purchase and follows limited coverage. For instance, the time for this life insurance policy is usually 10, 20, or 30 years. If an insured person dies within the set duration of a policy, then his family will get paid. But if the insurance holder dies after the coverage limit, the insurance-providing company will not be responsible for paying anything. Similar is the case with injuries and illnesses. Suppose the insured gets ill or involved in an accident resulting in serious injuries, but the policy coverage duration is over. In that case, the insurer will not pay for any medical assistance or financial aid.
Although this insurance program has a risky side, it is still one of the most popular insurance policies that people buy for their and their family’s better life. The reason for this popularity is the availability of larger payments at lower cost premiums if any need arises within the policy coverage duration. People who cannot pay larger premium rates upgrade to permanent coverage and stick to term life insurance while acknowledging the fact that sometimes a little of something is better than nothing at all.
CMFG life insurance provides term life insurance to people between 18 to 69 years. This insurance policy is available in all states, except for New York. CUNA Mutual Financial Group offers $5,000 to $300,000 in coverage, and the policy renews every five years until the policyholder turns 80. Your premium will go up each time you continue coverage. The policy includes an accelerated death benefit, which allows the insured to have the death benefit while still alive and diagnosed with a terminal illness. Following are some of the primary reasons for investing in a term life insurance policy:
- Get a high sum of money at affordable premiums
- A process that is easy to understand
- Financial security for children, in case of your sudden death
- Critical illness coverage and medical assistance as per need
- Accidental death benefits coverage for the insured and his family
- An affordable solution if you cannot afford the high premium costs of permanent life insurance
All these reasons are enough for people to purchase term life insurance and enjoy its benefits while they can. Some insurance companies also allow their customers to convert from one policy to another. So there are chances to purchase a term life insurance plan but convert to a permanent life insurance policy if you can manage to pay high rate premiums at some point in life. This convenience proves a better attraction factor to captivate the attention of more potential purchasers for this type of life insurance policy. Some of the common types of term life insurance programs are:
A mortgage life insurance policy is a term life policy explicitly designed to repay mortgage debts and associated costs in the event of the borrower’s death. These policies differ from traditional life insurance policies. The death benefit is paid out when the insured with a conventional policy dies who borrowed money from someone. Mortgage life insurance covers the present balance of your mortgage and pays out to the lender and not your family if you die.
- Decreasing life insurance
Decreasing term life insurance is a life insurance policy that pays out less over time. This insurance is often common to cover the balance of a repayment mortgage because the total balance of the mortgage decreases over time and will be paid off in full at the end of the term.
How does permanent life insurance work?
As the name suggests, this life insurance policy offers coverage programs that aid a person and his family till he dies. Permanent life insurance is an umbrella term for life insurance policies that do not expire. This life insurance program has three significant subtypes that differentiate one policy from the others. The most common types of life insurance programs are:
The two primary types of permanent life insurance are whole life and universal life. Whole life insurance offers coverage for the policyholder’s entire lifetime, and its savings can grow at a guaranteed rate with time. One of the most substantial benefits of any permanent life insurance policy is building its cash value with time. So, the more time passes after you buy permanent life insurance, the better cash value it will have all over. Whatever premiums a person pays, a partial amount from those premiums are included in a cash account, allowing a person to either take interest or invest the amount completely anywhere he wants.
In the case of these insurance policies, the cash value typically increases at the beginning of an insurance program. Every program has a set rate at which the cash value is increased. For instance, whole life insurance increases cash value at a fixed rate, but universal life insurance programs take influence from market trends and increase and decrease accordingly. A permanent insurance holder has the leverage to use cash value while he is still alive or later. It all depends upon the policyholder. Another option that most insurers provide their clients is exchanging some coverage and claims according to cash money in their accounts.
- Whole life insurance policy
Whole life insurance is a type of permanent life insurance, which means the policy-holding person is covered for the duration of their life as long as they pay their premiums on time. Whole life insurances are costlier than term life insurance plans. But they provide their policyholders with guaranteed payouts, fixed premiums, and other benefits and sound like the best insurance plan.
For instance, a $500,000 whole life coverage plan for a healthy 30-year-old woman costs around $3,558 annually, on average. But, the same level of coverage with a 20-year term life policy coverage will cost an average of about $193 annually. This drastic difference between annual premiums showcases the cost differences between these life insurance programs. According to some studies, financial experts recommend purchasing 10 to 15 times your yearly income in coverage, although your number may be higher or lower.
CMFG’s whole life insurance policy is available in all states of the USA, except New York and Montana, and to people between ages 18 to 85. Any person can purchase $1,000 to $100,000 of coverage without the need for a medical exam, and premiums will stay the same for the policy’s life. But the inclusion of insurance riders in your policy programs is not available.
- Pros: The most prominent benefit of buying a whole life insurance policy is that it covers an insured for a lifetime and constantly builds cash value.
- Cons: One of the drawbacks of whole life insurance policies is costliness. This policy is typically more expensive than term life insurance plans, so you might want to explore other options if you are looking for an affordable life insurance policy.
- Universal life insurance
Universal life insurance is another type of permanent life insurance. With a universal life policy, the insurance-holding person is covered for the duration of their life as long as they pay premiums and fulfill any other requirements of their insurance plan to maintain coverage. Universal life (UL) insurance provides policyholders with investment savings and low premiums. The price tag on universal life insurance is the minimum premium payment required to keep the policy program active for coverage in times of need. Beneficiaries only receive the death benefit.
Universal life insurance policies allow you to make larger or smaller payments, depending on your finances or the state of the accounts. If things go well, you may be able to stop making payments. This life insurance payout, called a death benefit, allows expenditure to your beneficiaries tax-free. Some universal life policies also build cash value, with gains growing tax-free. These are tax-free life insurance plans and are more affordable than whole life insurance.
- Pros: The pros of guaranteed / universal life insurance include its affordability. This type of insurance program is cheaper and more affordable than whole life insurance programs.
- Cons: The drawback of this life insurance is the consequences of missing a premium payment. Because of universal life insurance programs, missing one payment can forfeit an insurance program. And because this policy has no cash value, if an insured person misses premiums, he will get nothing in return.
- Indexed universal life
Indexed universal life (IUL) insurance is a type of universal life insurance that allows investments into index funds designed by the insurance company to keep track of the stock market. IUL policies are more complicated than plain universal life policies, often including caps on returns and complex fee structures.
- Pros: In the case of indexed universal insurance, an insured person can access cash value which grows with passing time, anytime he wants. The stock market significantly affects this insurance program, and its cash value increases according to the state of the stock market. Within limits, the payments and death benefit amounts are flexible.
- Cons: The cash value sometimes cannot take full advantage of stock market gains. Plus, these policies are often more complex than a term or whole life insurance policy, as the investments require monitoring.
- Variable life insurance
Variable life insurance is another prominent permanent life insurance policy with an investment aspect attached to it. The benefits and pros of variable universal life include a cash value, investment variety, flexible premiums, and a flexible death benefit. With the inclusion of a cash-value account, this policy invests in several sub-accounts available in the policy. A sub-account acts similar to a mutual fund, except it’s only available within a variable life insurance policy.
Suppose an insured person withdraws a greater cash value than the total amount he has paid in premiums using a variable life insurance policy. In that case, he has to pay taxes on the difference between both amounts. This is also applicable if you surrender the policy. You would have to pay surrender charges to make a withdrawal during the first several years.
- Pros: There is a chance for considerable gains and benefits if an insured’s investment choices do well. Plus, a policyholder can take partial withdrawals from the cash value or borrow against it.
- Cons: One of the drawbacks of this life insurance is that it requires an insured person to be hands-on in managing your policy as the cash value can change daily based on the market. Fees and administrative charges are deducted from the insured’s payment before going toward the cash value.
CMFG Life Insurance provides all these plans and policies and caters to its clients’ needs per the policy coverage plans and limits. With its insurance strategies and affordable solutions, CUNA Mutual Financial Group is thus a suitable insurance provider in the market for a variety of reasons.
Other types of life insurance
Some other life insurance policies and programs that\ are equally beneficial are as follows:
- Group life insurance
- Credit life insurance
- Accidental death and dismemberment insurance
- Joint life insurance
- Group life insurance
Group life insurance, as its name suggests, is a type of life insurance in which a single contract covers an entire group of people. Employers typically offer group life insurance as part of the company’s workplace benefits. Premiums are based on the group as a whole, rather than each individual. In general, employers offer essential coverage for free, with the option to purchase supplemental life insurance if you need more coverage. Typically, the policy owner is an employer or an entity such as a labor organization, and the policy covers the employees or workers of the group.
Credit life insurance is designed to pay off a borrower’s outstanding debts if the borrower dies. The face value of a credit life insurance policy decreases proportionately with the due loan amount as the loan is paid off over time until both reach zero value. This life insurance pays a specific loan balance, like a home equity loan. Your bank might offer to sell you a credit life insurance policy when you take out a loan. It pays off the lender if you die, just like mortgage life insurance.
- Accidental death and dismemberment insurance
Accidental death and dismemberment insurance covers an insured person if he dies in an accident, such as a car crash or collision. Accidental death and dismemberment (AD&D) insurance also pays out for the loss of limbs, as well as the loss of your sight or hearing due to any accidental event. This insurance protects your family’s finances in the event of losing your life or limbs. It can be an affordable way to supplement your life insurance or medical coverage if you’re seriously injured or die due to an accident.
- Joint life insurance
Under one policy, joint life insurance provides coverage to two lives, usually spouses or domestic partners. But it only pays a benefit when one of them dies. Some policies are term life insurance policies, but most are permanent whole life insurance or universal life insurance. This policy has two of the following aspects:
- First-to-die: In this situation, the insurance company pays out after the first policyholder dies. The policy would then expire; it doesn’t continue to cover the second person. These policies are scarce as the demand for them is low.
- Second-to-die: Pays out after both policyholders die. These policies effectively cover estate taxes or the care of a dependent after both policyholders die.
CMFG Life Insurance provides all these insurance programs and policies and ensures maximum financial aid to its clients.
Life insurance: Basic terms, coverage, and costs
Every life insurance program differs from the other. People who want to buy life insurance plans have a wide range of choices, from individual life insurance to family life insurance, couple insurance to life insurance for high-risk buyers, etc. But since every life insurance aims to provide protection and financial stability, most of their characteristics are alike. Some of the common features and aspects of these life insurance programs are as follows:
- Death benefits
Premiums are generally an amount paid that an insured person periodically pays to the insurance company for covering his risk. For taking this risky chance for the insured, the insurance provider charges a specific amount of money at particular intervals. The premium factor varies on a variety of different aspects, including age, gender, medical conditions, type of employment, location of the insured, etc. For term life policies, these premiums cover the cost of your insurance and administrative expenses. An insured gets to pay his premium money into a cash-value account with a permanent policy.
The value for permanent premiums is fixed, and any external factors do not cause any fluctuation in the rates. But in the case of term life insurance plans, the premium rates are not fixed and increase with time.
In life insurance programs, there is a feature called adding a beneficiary. A beneficiary is a person or an entity that receives money after an insured person dies within the policy coverage duration. Choosing life insurance beneficiaries is a crucial aspect of your life insurance program. Usually, people add their spouses, children, or parents as beneficiaries, but they can choose whoever they want to. Any insurance company does not mandate blood relations or immediate family members. Insurance companies also allow adding primary and secondary beneficiaries. After an insured person dies, the insurance company contacts the primary beneficiary. If the primary beneficiary is unable to collect the money in any case, the insurance company reaches out to the second beneficiary and hands over the money to them.
The primary purpose of life insurance is financial stability. Adding beneficiaries in your life insurance programs allows your loved ones to get money and continue their circle of life even when you no longer act as their breadwinning source. This is one of the biggest advantages of life insurance plans for people who want to ensure the financial security of their loved ones for a more extended period of time.
- Death benefits
Life insurance policies, unlike other insurance programs, offer death benefits. This is generally the amount of money that any beneficiary is eligible to get after the death of an insured person. A policyholder chooses the amount of money when buying a policy, and mostly this amount is fixed according to life insurance plans. Permanent life insurance programs are more advantageous in this aspect because they have an additional benefit of financial aid if the cash account grows with time after selecting a particular policy plan. This amount of money is given as a pension or an annuity. Death benefits are not subject to income tax for life insurance policies, and named beneficiaries usually receive the death benefit as a lump-sum payment.
Riders are additional and optional benefits that an insured can add to his policy program in terms of life insurance policies. Suppose an insured person cannot work anymore and is unable to pay his premiums at some point in his life. Adding life insurance riders can help and assist a policyholder in dealing with unexpected things that prove burdensome later. Riders are the extra benefits that a policyholder can buy to add to a life insurance policy. The most common include guaranteed insurability, accidental death, premium waiver, family income benefit, accelerated death benefit, child term (you can include a child in your policy), long-term care, return of premium riders, etc. CMFG Life Insurance offers these riders inclusion and makes their insurance programs more exclusive for their clients.
Who needs life insurance?
Although life insurance is beneficial for every person, it is exclusively essential for parents raising children or people who have disabled parents or financially dependent spouses and families. Like all insurance programs, even life insurance aims to solve an insured’s financial problems. Life insurance is essential because when you die, your income disappears. Without income, a family cannot run its everyday living cycle. If you have a spouse, kids, or anyone
dependent on you financially, they’re going to be left without financial support and stability. By adding your beloved people as your beneficiary, you can ensure their financial assistance after your death.
Primarily, anyone who has a family to support and is an income earner needs CMFG Life Insurance. Because of their contribution to the family’s economic value, homemakers also need life insurance coverage. Even children can be considered for life insurance because their future income potential is at risk.
For a person to get life insurance, it is not necessary to have a financially dependent family, but with the help of these insurance programs, a person can make his life more secure and stable. After your death, you still require a funeral and burial, and both these things are incredibly costly. Suppose any person does not intend to become a burden on their family members after their death. In that case, he can buy this insurance program, and the insurance company can cover his funeral and burial expenses according to the policy type. In addition to its death-side benefits, life insurance policies also help if a person loses his source of income and requires money to meet his needs. So, life insurance is highly advantageous to its policyholders in all its existing forms. Times are changing, and there is no certainty to ensure financial stability with life insurance policies.
How much life insurance do you need?
The amount of life insurance you may require depends on various factors, including your policy type and what coverage you want to get. Individual life insurance will be a lot less than joint life insurance. Similarly, the terms and permanent life insurance rates differ drastically in coverage and money. The amount of life insurance you need depends on what a person wants to cover through his insurance plan. If you’re just covering end-of-life expenses, you won’t need as much as if you’re going to replace lost income. The factors that assist an insured in determining his insurance needs are:
- The number of dependents a person has to provide for
- The lifestyle a person wants to provide for his family and beloved ones even after his death or income loss
- The plans a person has for his children’s education and better future, including business opportunities and marriage
- Future plans for business and setting up a start-up business
- Your current income and which program you can afford easily
The formula to determine how much insurance coverage you may need is easy to calculate in the following way:
In order to calculate the amount of life insurance needed, multiply your annual salary by the number of years left until retirement. For example, if a 40-year-old makes $20,000 a year, they will need $500,000 (25 years × $20,000) in life insurance.
Using this way, any person can calculate their insurance needs by evaluating their income and policy coverage they want to achieve.
What can life insurance provide you?
CMFG Life Insurance programs benefit their policyholders in a lot of ways. The following are some of the favorable aspects of life insurance policies:
- This insurance ensures that your immediate family has some financial support in the event of your unforeseen and unexpected demise
- To finance your children’s education and other needs while they are in their growing or developing years and leave them an inheritance
- To have a savings and backup plan for the future so that the insured has a constant source of income after retirement or in case of income loss.
- Ensures additional income sources when your earnings are reduced due to severe illness, accident, or loss in business.
- To provide for other financial contingencies and lifestyle needs according to day-to-day requirements.
Life insurance is one of the most beneficial insurance plans present in the market. These insurance programs have extended policy options so that every person can find a suitable and affordable option for himself and his family. Life insurance is specially designed to offer financial safeguards against the policyholder’s death and works as a good investment plan, which helps you meet several life goals in turn. This indicates an immensely pressing need for insurance in today’s risky life where people are prone to many health issues, and life expectancy is pretty lower than in older times.
Every person wants his family to live a tension-free life and explore all possible opportunities. But this is not possible without constant financial aid. Life insurance plans help policyholders and family members deal with contingency moments that disturb the ongoing life cycle. CMFG Life Insurance plans are thoroughgoing solutions and have made life easier for their existing clients with their affordable premium rates and claim coverage.