What, Why and How of Life Insurance

Text 408-854-1883 for a field underwriter near you and to match your insurance needs from 17 insurance carriers.
What is term life insurance? Provides death insurance coverage for 10, 20 or 30 years with no cash accumulation and return of premium. More affordable than whole life insurance.
John Hancock: Runner-Up, Best Overall 
AIGBest Level Term 
Transamerica: Best Guaranteed Renewable Term
Mutual of Omaha: Best for Young Families ; Includes accidental death benefit rider (2x death benefit), children rider and waiver of premium rider
Mutual of Omaha has added a new product to their portfolio, Guaranteed Advantage Accidental Death InsuranceGuaranteed Advantage pays a benefit to your clients’ family if they die as a result of an accident. When term life declines happen or the client can’t afford the premiums.
How much life insurance do I need? Based on your assets and income, you want to insure your value in the event of death to pay for the mortgage balance, other debts and to leave and estate to your family.
Most insurance companies say a reasonable amount for life insurance is six to 10 times the amount of annual salary. Another way to calculate the amount of life insurance needed is to multiply your annual salary by the number of years left until retirement.

The calculations behind life insurance rates are all about life expectancy. That’s why life insurance costs more as you get older.
If you outlive your policy term, the insurance ends and you must buy another policy if you still want to carry life insurance. However, the annual premium for another policy could be quite expensive because you’re older and an insurer will take into account health conditions. That’s why it’s important to choose a suitable term length early in life.
You would need to buy an additional term life policy at an extra charge if you find a term life policy isn’t sufficient.
Which is better term or whole life insurance? Use term or whole life insurance based on your financial and insurance goals. If you want to leave a legacy or an estate to your family with no cash accumulation and return of premium, choose Term life.
Whole life insurance is a “straight life” or “ordinary life,” is a life insurance policy which is guaranteed to remain in force for the insured’s entire lifetime, provided required premiums are paid, or to the maturity date. Whole Life Insurance is permanent insurance with strong guarantees. It has a guaranteed death benefit, guaranteed premiums, and guaranteed cash value growth.
Cash Value builds inside of whole life insurance policies. Imagine this cash value portion like a savings account, that you can access at any time. We say it is a savings account because the cash value will only go up. It never fluctuates up and down. You can get extra cash value by getting more paid-up additions on your policy. See infinite banking. You can access the cash value by:
– Loans
– Distributions
– Take out dividends as cash
Life Insurance Amount Calculation: How much life insurance do I need?
Another way to calculate the amount of life insurance needed is to multiply your annual salary by the number of years left until retirement. For example, if a 40-year-old man currently makes $20,000 a year, the man will need $500,000 (25 years x $20,000) in life insurance.
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2020 Tax Brackets and Rates

Text 408-8541883 and agent near you to show you income and disability benefits from life insurance products like Index Universal Life Insurance and Fixed Indexed Annuities.

In the United States we have what is known as a progressive tax system. This means that we pay a higher percentage in taxes as our income goes up. What people may not necessarily realize is that we actually pay taxes at each one of these tax brackets along the way.

There are 12 states with zero or less income taxes such as Nevada.

Capital Gains

Long-term capital gains are taxed using different brackets and rates than ordinary income.

 For Unmarried IndividualsFor Married Individuals Filing Joint ReturnsFor Heads of Households
 Taxable Income Over
0%$0$0$0
15%$40,000$80,000$53,600
20%$441,450$496,600$469,050
 Additional Net Investment Income Tax
3.8%MAGI above $200,000MAGI above $250,000MAGI above $200,000
Source: “2020 Tax Brackets,” Tax Foundation and IRS Topic Number 559

Qualified Business Income Deduction (Sec. 199A)

The Tax Cuts and Jobs Act includes a 20 percent deduction for pass-through businesses against up to $163,300 of qualified business income for single taxpayers and $326,600 for married taxpayers filing jointly (Table 7).

Filing StatusThreshold
Single Individuals$163,300
Married Filing Jointly$326,600
Source: Internal Revenue Service

Annual Exclusion for Gifts

In 2020, the first $15,000 of gifts to any person is excluded from tax. The exclusion is increased to $157,000 for gifts to spouses who are not citizens of the United States.

AIG Final Expense Life Insurance

AIG final expense coverage is a guaranteed issue whole life insurance policy to cover burial or other funeral expenses.

Text 408-854-1883 for a field underwriter near you.

There are no health questions or any medical underwriting of any kind. Your acceptance is guaranteed.

Since it’s a whole life policy, the way it works is very straightforward.

  • Coverage can never decrease
  • The policy can’t expire at any age
  • Premiums can never increase
  • Non-cancellable except for non-payment

That’s all there is to it. Your policy will literally never change. Only you can change it.

Want to see a consumer brochure? Click here if so.

AIG Guaranteed Issue

Since the policy is a type of life insurance, upon your passing AIG will cut a tax-free check for the payable face amount directly to your beneficiary.

There’s no rules or restrictions regarding how the money is used.

The whole idea is that every funeral home in America will take cash. The policy gives your family the money needed to pay for your end of life expenses. If there’s money left over, it would simply stay with them to enrich their lives as they see fit.

Whether you need insurance to cover a cremation or burial, AIG’s guaranteed issue whole life plan will provide the funds so your family won’t have to.

AIG Final Expense Insurance Product Availability

As is the case with all insurance, this AIG burial insurance policy has limits on the amount of coverage you can buy, and where it’s sold.

  • States Offered: All 50 & DC except NY
  • Issue Ages: 50-85
  • Face Amount Options: $5,000- $25,000
  • 2 Year Waiting Period: Yes
  • Purchase Options: Through independent agencies such as Choice Mutual or from AIG Direct (there’s no difference in price regardless of who you buy from)

A Standard Waiting Period

AIG Guaranteed Issue

Because their policy is guaranteed acceptance, it has a two-year waiting period before the policy will pay out a death benefit.

This is important

All guaranteed issue final expense policies (with any company) will have a minimum two-year waiting period. There’s no such thing as a no health question policy with 6 month or a 1 year waiting period. It’s always at least two years.

So during the first two years, AIG will refund all premiums you’ve ever paid plus 10% interest. After two years, the policy will pay out the full face amount for any reason moving forward.

There is one exception to the waiting period however…

The one exception to the two-year waiting period is accidental death. If you pass away from an accident (car or plane crash, a tree falls on you, etc) the full amount will payout even if the accidental death occurs during the first two years.

AIG Burial Insurance Has Living Benefits

AIG guaranteed life insurance is the only guaranteed issue final expense carrier that offers living benefits with their policy.

AIG Guaranteed Issue

Please Note: Any policy sold in CA will not include either rider, and the terminal illness rider is not available in District of Columbia.


They include, at no extra charge, these two riders on every policy.

  • Terminal Illness Rider: If you are ever diagnosed with a terminal illness and given a life expectancy of 24 months or less, you can access up to 50% of your death benefit early. This rider is only available after the two-year waiting period has passed.
  • Chronic Illness Rider: Allows for a one-time lump sum payment if the insured becomes chronically ill (cannot perform 2 out of 6 activities of daily living).

Again, both of these riders are included with every policy. You do not have to pay extra for them.

There is no other guaranteed issue policy that offers any living benefits. Pretty cool huh 😃.

AIG Guaranteed Issue Whole Life Rates

Below are actual prices for AIG guaranteed acceptance final expense insurance.

The cost of burial insurance depends on a few variables. Please remember your final insurance price will depend upon the following criteria:

  • Your exact age
  • Gender of the insured
  • Face amount selected
  • Resident state of the insured

Oh and don’t forget

You are not limited to these face amounts. AIG will allow you go purchase any whole number between $5k and $25k. For example, you could buy $7,000, $13,000, $22,000 etc.

Female Rates

AGE$5,000$10,000$15,000$20,000$25,00050$18.92$35.83$52.74$69.66$86.5755$20.93$39.86$58.78$77.71$96.6460$23.57$45.14$66.70$88.27$109.8465$28.26$54.51$80.76$107.02$133.2770$36.21$70.41$104.62$138.83$173.0375$48.91$95.82$142.73$189.63$236.5480$68.56$135.12$201.69$268.25$334.8185$103.10$204.20$305.31$406.41$507.51

Male Rates

AGE$5,000$10,000$15,000$20,000$25,00050$26.96$51.92$76.89$101.85$126.8155$29.25$56.50$83.74$110.99$138.2460$32.58$63.17$93.75$124.33$154.9265$37.55$73.09$108.64$144.18$179.7370$47.57$93.14$138.71$184.28$229.8575$63.25$124.49$185.74$246.98$308.2380$88.57$175.15$261.72$348.30$434.8785$150.43$298.86$447.30$595.73$744.16

When It’s A Good Idea To Buy This AIG Policy

Make no mistake, AIG guaranteed issue final expense offers a very competitively priced no health question plan. For folks who truly need or want a no health question policy, it’s often a superior choice relative to the options out there.

But here’s the deal…

There are only certain situations where AIG’s guaranteed policy is your best option. This policy is not right for everyone. AIG isn’t a like Alex Trebek life insurance or AARP burial life insurance where it’s a bad option all around. For some folks, it’s a great deal.

Take a look at the list below. These health situations are generally when someone should buy a guaranteed issue policy which would mean AIG is a great option.

cremation insurance

This list isn’t completely exhaustive, but it does represent a vast majority of the reasons why someone would be best served by a guaranteed acceptance life policy.


Insider Tip: if you don’t have any of these health conditions, you can probably qualify for a plan with underwriting. That will result in a plan without a waiting period and a lower premium. Call us at 1-800-644-2926 and one of our agents will figure it out for you in less than 60 seconds.


Bottom line?

If none of these situations apply to you, you probably shouldn’t buy a guaranteed issue plan. You should instead try for a policy with underwriting. Just call us and we’ll find you one 😎.

However should you have some of these health issues, AIG is likely your best bet, and you should sign up now.

  • Currently confined to a nursing home, hospice care, hospital, or any medical facility
  • Alzheimer’s or dementia or ever taken any drugs to treat memory problems
  • Dialysis
  • Been advised to have an organ transplant
  • Full blown stroke within the last 12 months (TIA mini stokes don’t count)
  • HIV or AIDS
  • Insulin shock or diabetic coma within the last 24 months
  • Heart attack within the last 12 months
  • You’ve had or been treated for cancer in the last 24 months
  • Terminal illness with a life expectancy of 24 months or less
  • Heart or circulatory surgery within the last 12 months
  • ALS
  • Congestive heart failure with diabetes
  • Amputation due to diabetes within the last 24 months