Life Insurance FAQ

Q. What is the difference between Term and Whole Life Insurance?
A. Term is issued for a specific number of years and once the years have passed, Term is no longer valid while Whole Life is valid until death.
Q. Which is better?
A. That depends on your needs. If you are young and have a family and a mortgage. It is in your best interest to have Term Coverage for the amount it costs to educate your children and pay off your mortgage. At the same time, you should have Whole Life for your final needs. When purchased while young, the premiums can be more affordable.
Q. How much interest will I get?
A. Whole Life insurance builds cash value but does not accrue interest. The cost of a Whole Life Fraternal policy includes interest. For example, a person at age 30 purchases a 5-payment plan with a face value of $20,000. The Annual premium is $960 payable for 5 years and amounts to a total of $4,800. This person paid $4,800 for $20,000 and this coverage is active to the end of the person’s life.
Q. What does Cash Value mean?
A. This is the amount your policy is worth should you want to cash it in and not leave it for your beneficiary to pay your final costs. These numbers are calculated by our actuary and can be found within your insurance certificate.
Q. What does Face Value mean?
A. Face Value is the amount of insurance you originally purchase, payable in full upon death.
Q. Why should I buy insurance for my child?
A. There are many great benefits to purchasing a life insurance policy for children. Premiums are very inexpensive when the child is young: for pennies a day you can provide insured membership. Children eventually become adults, and insurance now will provide insurability for the future: statistics tell us that one in four children who reach the age of sixteen may develop a health problem such as diabetes, which could possibly prevent your child from being insured otherwise. Also, with Whole Life insurance, policies build cash value against which your child can borrow when starting out. There are two ways to purchase life insurance for a child. First, the Juvenile Term insurance policy, available to those up to 16 years of age, covers your child up till age 25. The policyholder then has the option to choose a Whole Life policy for up to three (3) times the Term amount purchased without a medical exam. Second, it may better suit your situation to purchase a Whole Life policy for your child instead, based on the same tables for an adult policy. (View Types of Policies for more information.) When you buy fraternal life insurance for your child with ASOP, the child may then apply as a senior in high school for stipends and scholarships that help pay for higher education costs.
Q. How much Whole Life insurance should I buy?
A. The younger you are, the less it costs based on industry standard life expectancy tables, so you should buy the most you can afford. Today, funeral costs average $10,000. Industry professionals suggest that Americans should carry at least enough coverage to provide for end of life costs for oneself.
Q. How do I read the insurance tables to understand what the cost of my policy will be?
A. Choose the kind of policy you want, find your age in the first column, then look across the table for the premium amount under the frequency of payment (M-Monthly, Q-Quarterly, SA-Semi-Annual, A-Annual) and multiply it by the number of thousands you wish to purchase. For example, should you wish to purchase a Five Year Payment Whole Life policy at age 30, it costs $41 for an annual payment for $1000 of coverage; and should you want $15,000 coverage, multiply 41 x 15: the annual premium amounts to $615 payable for 5 years. In this case, $3075 purchases $15,000 of coverage.
Q. If I purchase a policy today, when does it take effect?
A. Your policy takes effect immediately upon issuance. However, you have ten calendar (10) days after receipt to review your policy and cancel should you choose to do so.