Life Insurance
Why is life insurance worth it?
There are many answers to the question of why is life insurance important. But by and large, the most important one is ensuring your family’s financial security and peace of mind.
If anyone depends on your income, they would most likely struggle if you were to pass away.
That’s why life insurance is so important to have. There are different types of life insurance policies, but essentially they all pay cash to your loved ones when you die. Money from life insurance can be used to cover daily living expenses, a mortgage or rent payments, outstanding loans, college tuition and other essential expenses.
Life insurance is the best way to ensure that your loved ones would be in a good financial place if you and your income were no longer in the picture.
What does life insurance cover?
Life insurance covers virtually any type of living expense. Some common expenses include:
Immediate Expenses
Funeral and burial costs
Uncovered medical expenses
Mortgage or rent
Car loans
Credit card debt
Taxes
Estate settlement costs
Ongoing Expenses
Food
Housing
Utilities
Transportation
Health care and insurance
Continue a family business
Future Expenses
College costs
Retirement
Do I need life insurance?
If someone depends on you financially, you are most likely someone who needs life insurance.
Life insurance provides cash to your family or loved ones after your death. This cash, known as the death benefit, replaces your income and the many non-paid ways you support your household. Your family can use this cash to pay for expenses like funeral costs, a mortgage, college tuition and more.
Just a few examples of people who often answer “yes” to the question of “Should I get life insurance?” include:
Married or partnered couples
Many partners find it difficult to make ends meet without the other earner’s income in the picture.
Married or partnered couples with kids
In addition to losing one partner’s income, the surviving parent may have to pay for childcare and more without the other parent around to pitch in.
Single parents
As the sole income earner for your family, you’ll want to think about how to replace your child’s only source of financial support.
Stay-at-home parents
From cooking meals to shuttling kids to school to helping with homework, stay-at-home parents perform many critical responsibilities that would be costly to outsource.
Empty nesters
Many surviving partners would not be able to maintain the lifestyle they worked so hard to achieve without life insurance.
Retirees
Depending on the size of your estate, your heirs could be hit with an estate-tax rate of up to 45%. Fortunately, cash from a life insurance policy gives heirs access to tax-free money to pay for immediate costs and more.
Business owners
Life insurance can help your business in many ways if you, a fellow owner or a key employee were to pass away.
What are the different types of life insurance?
Types of life insurance generally fall into two categories:
Consider a Mix of Term and Permanent
Everyone’s financial situation is unique, and life insurance is designed to work with your exact circumstances. While many people choose either term or perm, others find that a mix of the two offers the best of both worlds.
With so many types of life insurance policies out there, it can be a little confusing about which one (or ones!) to choose and how to go about getting it. One of the best ways is to work with a licensed insurance agent who can walk you through the entire process.
The key is to start today.