Life insurance is something most people have at least heard of,
but not everyone understands who should get it and what it’s
actually for. Contrary to what you might expect, life insurance
isn’t just for the elderly. Instead, it’s a guarantee for your loved
ones that they’ll have the financial resources they need in the
event of your death. While the specifics can vary from plan to plan,
you’re paying to ensure the well-being of the people you leave
behind, whether that happens today or decades from now.
From Mutual of Omaha to Plum Life to The Capitol Life Insurance,
there are many life insurance providers to choose from, each with
their own range of plans and options to choose from. Between the
range of choices and the prospect of dealing with your own mortality,
making sense of life insurance can seem like a daunting task.
However, it doesn’t have to be. With a bit of basic information, you’ll
be prepared to decide for yourself if life insurance is right for you
and your family.
Life insurance plans in the United States are usually divided into
term and permanent policies. A term policy lasts for a set period of
time, such as 10, 20 or 30 years. If the insured individual dies while
the policy is in effect, the beneficiary receives a payment from the
insurance company. Term insurance has the benefit of usually being
cheaper than permanent insurance with equivalent benefits.
Permanent insurance… which also includes whole life, variable life
and universal life insurance… combines a death benefit with some
form of cash savings. Part of the premium covers the cost of the
insurance, while the rest is set aside and earns interest. Generally
speaking, you can withdraw that amount early or let it ride for a much
larger sum upon your death. You may also be able to borrow money
against the policy or use it to pay for future premiums.
If You Have Dependents, You Need Life Insurance
The most common reason for needing life insurance is if you have
dependents… people who depend on you financially, such as children,
a spouse that doesn’t work or a parent who you support. At the very
least, a life insurance policy can cover the costs of your final expenses,
such as the cost of a burial or cremation, funeral and outstanding debts,
which in turn keeps those things from burdening your family.
With a better policy, you can also provide money to cover a mortgage,
education, or other large expenses that could be too much to manage
with the loss of your income otherwise. If used wisely, life insurance is
the final way of providing for those you care about.
Determining Your Life Insurance Needs
Some people shy away from life insurance policies because they think
they can’t afford them. While the best plans can definitely be expensive,
cheaper plans are available, especially if you’re comfortable with a term
policy.
Other factors also affect how much life insurance will cost. Smokers
and individuals with serious health conditions can expect to pay more
for their policies, while younger people and women tend to have lower
premiums than older adults and men. In fact, the premium for a plan
that has coverage of $250,000 can cost less than $200 per year
depending on your demographic and the plan you select.
Finding Affordable Life Insurance
The level of life insurance coverage you need changes over time.
When you’re young and have no spouse or children, you may not
Need a policy because no one is counting on your income. The same
is true for individuals with adult children and those who have enough
money in savings to cover their loved ones’ expenses.
Another consideration is when to buy a life insurance policy.
Some people wait until they marry or have children. Others purchase
a guaranteed renewable policy before they have dependents. This type
of policy ensures they will always have coverage as long as they pay
the premiums on time.
Either way, buying one when you’re younger and healthier is usually
cheaper than waiting until you’re closer to needing one, even if you
end up spending money on a policy you likely won’t need. The right time
for you to buy one will ultimately depend on your personal financial and
health situation.
How to Find a Policy
There are plenty of online tools that can evaluate your insurance needs
and help you choose a policy that works for you. Some are run by
individual insurance companies, while others are maintained by
independent sources.
Alternatively, you can also seek out an expert who understands the
industry and available products to help you make an informed decision.
Insurance agents, estate planning lawyers and tax professionals can
help you navigate the many life insurance policies and providers out
there. They can explain the pros and cons of life insurance and help
you find the perfect policy for your situation.
Contact Me Today!
Hayden Childs
Alabama Licensed Agent
(205) 269-1382
https://www.helloplum.com/agent/childs-806
I STILL MAKE HOUSE CALLS!
- Staff Writer
Thank you George for your encouraging comment. I appreciate it very much!
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