Life Insurance
Life insurance provides peace of mind and security for those you love. Think of it as a life preserver that keeps financial security afloat in the event of a loss of a loved one or business partner. Life insurance is a smart investment for a number of reasons. It helps pay debts and taxes after a death. It allows family members to maintain an adequate standard of living. It provides immediate access to cash to help cover funeral costs and pay bills. It helps support surviving families goals and dreams.
Who needs Life Insurance?
You may not think you need life insurance if you are single, retired or have grown children. Think again. While your needs may change, life insurance is a great investment to help protect any demographic.
Married people purchase insurance to protect their children and spouses in the event death occurs. Even if a spouse has income, death benefits can help fund college costs and daily living expenses such as rent, utility bills, credit card debt and car loans.
If you're a single parent, you carry even more of the burden as the sole source for paying the bills, cooking, chaffering and more. In the event of your death, protecting your families financial future is more important than ever.
Even if your children have left the home, you still need to protect your spouse. Ask yourself, do I have the assets on hand for my spouse to maintain the same lifestyle in the event I die? Protecting each other provides comfort and peace of mind.
If you are retired, your heirs could be hit with an estate tax payment. Proceeds of life insurance would pay off these costs, allowing them to take care of taxes, funeral expenses and other debts you may have incurred. Life insurance assets are generally income tax free so it won't add to income tax liability.
Life insurance can also protect a business. In the event a business owner dies, life insurance can be structured to fund a buy-sell agreement. A buy-sell agreement provides funds to the surviving business owner to buy the companies interests of the deceased owner at a previously agreed upon price. The surviving family gets the money originally agreed upon and the surviving business owner keeps the business.
If a key employee dies, key person insurance can protect a business. Key person insurance provides flexibility to a business to either hire a suitable replacement or work out other arrangements.
If you are single without children you may think you don't need insurance and you may not. However, insurance rates are lower if you're healthy and young. Furthermore, if you provide support for aging parents or siblings with special needs, life insurance would cover debt in the event you die.
There are So Many Types of Life Insurance. How Do I know Which One is Right for Me?
Term Life Insurance provides a predetermined death benefit and covers you for a predetermined number of years. Typically five years to thirty years. Annual premiums are fixed and are based on your health and life expectancy when you apply for a policy. This type of coverage is very common and protects the surviving spouse in the event of a death.
Permanent Life Insurance is a combination of a savings or investment account with a death benefit and covers the policy holder until they die, even if they live to a ripe old age. Depending on the policy, the premiums may be fixed or not and are based on your health and medical history. These types of policies accumulate some cash value the longer you hold them. However, the premiums are generally higher than Term Life. A benefit to permanent life insurance is you can borrow against it. Once done however, it would diminish the value.
Mortgage Protection Life Insurance protects against loss of income or a catastrophe and helps pay for the mortgage on your home. This is often purchased for those that do not meet the underwriting criteria for term life insurance. One other benefit. Mortgage Life Insurance can often be written without passing a medical exam.