You buy life insurance because it’s the best way to protect your loved ones. It’s a financial decision…kind of. It’s an emotional decision…sort of. It’s about love and caring and the future…most definitely. the unthinkable can happen to anyone. That is why you need to prepare and make sure your family will be financially secure if tragedy strikes. Life insurance coverage is one of the best gifts you can give your family. We recommend term life insurance because it is simple and affordable. Term life insurance is worth it if you’re looking to help ensure financial security for your family at a budget-friendly price. It’s a simple, affordable type of life insurance plan that covers your family for a set period of time, typically 10, 15, 20, or 30 years. You choose a term length that matches the time frame of your financial responsibilities. For example, until the children are adults or your mortgage is paid off. Your beneficiaries can use it to cover a lot of different costs, like burial expenses, the mortgage, and even the kids’ college fund. Let’s take a look at the details of what life insurance does cover- and what it doesn’t…

Life Insurance Covers…

End-of-Life Expenses

Funeral cost alone is $7,000 to 10,000 on average. That is a lot of money for a family to come up with especially when they are grieving. Some families have even fallen apart over the funeral expenses of a loved one. But when you have life insurance, burial costs will not be a concern. Your family can focus on the important business of grieving and healing.


Your life insurance gives your family choices by providing the benefits to help pay off debts. Life insurance provides cash when it’s needed most. Your life insurance policy can deliver a specified sum of money at the exact time of need. Upon your death, your family can be assured that the amount you’ve chosen will be there almost immediately. And that death benefit is generally not subject to federal income taxes. For example, a $500,000 policy provides $500,000 in death benefit proceeds. Just be aware that anyone you share debt with-like your spouse or the uncle who cosigned on your car needs to be named as a beneficiary on your life insurance policy, otherwise, they will not get the money or be able to pay off the debt.

Everyday Bills

Your life insurance will help your family keep the light on and the car running and the children fed. Your family can use the death benefit to cover daily living expenses for months or even years. If you have children your term life policy helps you leave them a lasting legacy. And if there is anything left over, your life insurance payout can be a great way for your spouse to support your kid’s passions, like paying for lessons or giving them the opportunity to travel.


Your term life insurance is not just for your children it is for your spouse also. The correct amount of term life insurance could set them up for financial peace for the rest of their lives. They could invest some of the life insurance payouts so they can live on the interest it earns. It is wise to have a qualified investment pro now, so if your spouse ever needs to consult with an investor with your term life insurance payout your spouse would already have a trustworthy advisor.

What Life Insurance Does Not Cover…

Expired Policies

Term life policies do not last forever. That is why it is called term insurance-it is set for a time period. If you pass away after that time frame, your family will not receive a death payout. That is why it is extremely important that you know when your term policy expires. You can usually renew your policy but the rates may change.

Criminal Activity

If you die while committing a crime or participating in illegal activity, the life insurance company can refuse to make a payment. For example, if you are killed while stealing a car, your beneficiary won’t be paid. … Trespassing is a crime — even if you don’t know you’re trespassing. The good news is that the no-criminal-activity rule also works in your favor. If your beneficiary kills you, they are not going to get the money. How comforting is that??? However, at least they will get rich from murdering you

Insurance Fraud

The punishment for committing insurance fraud ranges from probation, fines, community service, restitution, confinement in county jail, and/or state prison. According to the law, the crime of insurance fraud can be prosecuted when: The suspect had the intent to defraud. Insurance fraud is a “specific” intent crime. the insurance company has a much broader definition of fraud. For example, did you tell the insurance company you don’t smoke but you really do? If they find out, they will not pay your beneficiary. If they find out before you die they may cancel your policy. So make sure you are honest about everything upfront.

What Life Insurance Might or Might Not Cover…

Death By Risky Hobby

While exact details will vary from company to company, certain activities that increase your chances of death can cause you to pay more for a rider to your policy. Skydiving, scuba diving, aviation, and logging all carry high amounts of risk that some life insurance companies may choose not to cover. If you engage in hobbies, jobs, or activities considered risky by insurance companies, you’d be wise to get a rider to your term life insurance policy.

Death By Suicide

The life insurance suicide clause is a provision that’s in place during the first two years of the policy. Normally, when the policyholder dies, the death benefit is paid to the beneficiaries as a tax-free, lump-sum amount (or, sometimes, a series of payments) and that’s the end of the transaction. However, if the death is a result of self-inflicted injury within the first two years the policy is in force, the insurer can refuse to pay. This provision prevents an applicant from getting a life insurance policy and taking their own life immediately afterward so their loved ones can receive the death benefit.

Accelerated Death Benefits

An accelerated death benefit allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. The Accelerated Death Benefit (ADB) is a provision in most life insurance policies that allows a person to receive a portion of their life insurance money early — to use while they are still living. For instance, let’s say Joe has a $1 million term life policy and is diagnosed with dementia. He takes an early payment of $350.000 to cover his treatment and end-of-life care. When he passes away, his wife gets the other $650,000.

Long-term Care

You may be able to cover some types of long-term care costs with an accelerated death benefit rider. Just remember you are using the money from your death benefit, so there will be less for your family after you pass. Instead of wiping out your life insurance, you may want to learn about long-term care insurance.


The best way to protect your income is by having both a life insurance and disability insurance policy in place. You cannot take an early life insurance payout to cover short-term disabilities that last less than 90 days. You may be able to use an accelerated death benefit rider but this brings up those same problems of increasing your monthly premium and it cuts into your family’s financial future.

Leaving a Legacy

Leave a Legacy to Your Favorite Charity. With the recent election, many social media newsfeeds have been full of photos showing friends and family marching, volunteering, donating, and giving back to organizations and movements they are passionate about. If this resonates with you as well, perhaps your legacy should be giving back to your favorite college, religious organization, or local civic organization. Life insurance can offer a way to ensure if you’re no longer around to donate or volunteer, you can still continue giving back and advocating for what you believe in.

Rollins Insurance represents multiple A-rated insurance companies to make sure we deliver the most competitive rate packages to our clients in Kentucky and Ohio.

Contact us (859-781-7283) for more information or get a free quote!

About Rollins Insurance 

Rollins Insurance is an independent insurance agency providing our clients the best prices with the most coverage possible since 2008. We represent multiple A-rated insurance companies to make sure we deliver the most competitive rate packages to our clients in Kentucky and Ohio. We find that most people are under-insured and over-paying when we meet them. We love what we do and our primary business is Personal Auto, Homeowners, and Life and Health insurance. We are a family-owned and managed business that specializes in providing needs-based insurance services.
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