Even though Thanksgiving will be a little different this year, with many in-person gatherings being replaced by Zoom or FaceTime meetings, it’s still a chance for families to safely unite as closely as possible. And with everything going on in the world right now, it’s critical that your family understands the importance of protection from the unexpected. Basically, there’s no better opportunity to talk with your family about life insurance.
Life insurance allows us to protect our families after we’re gone, and having a discussion over the holiday weekend is the perfect way to say thanks with meaning. An independent insurance agent can help get you and your family set up with the right life insurance to cater to your final wishes exactly how you desire. Here’s a closer look at the importance of life insurance, and why now is the right time to talk with your family about finding coverage.
Why Is Having Life Insurance So Important?
Mainly because you’ll want to have a plan in place for how your funds will be distributed after you pass. Life insurance can provide a beneficiary, or person of your choice, with a payout, otherwise known as a death benefit, after you go. But you can also allocate your money in a number of different ways.
People purchase life insurance for the following reasons:
|To pay off outstanding debts:|
|Many people purchase life insurance to help their family pay off any of their remaining debts, such as mortgage loans, after they pass away. That way, the deceased’s family can be freed from covering huge outstanding balances following the loss.|
|To pay for tuition:|
|Another popular option is to allocate life insurance savings into an account for a child’s college or graduate school education. Death benefits can also help a grown child pay off remaining student loans.|
|To cover final expenses:|
|Death is expensive, with the average cost of funerals and burials easily surpassing $10,000. Life insurance can help prevent a policyholder’s family from having to pick up their final tab.|
|To donate to charity:|
|Life insurance holders can also choose a charity or their alma mater to be a designated beneficiary. Charitable contributions are a popular option among policyholders with no surviving next-of-kin or spouses at the time of their death.|
|To provide for a spouse:|
|Many life insurance policyholders designate their spouse as their beneficiary. Leaving a spouse a large sum of money after you pass can help provide them with financial security for their future.|
An independent insurance agent can talk with you about even more options provided by life insurance, and help you find the type of coverage that works best for you and your family’s needs.
Why Choose Permanent Life Insurance?
Permanent life insurance policies are designed to cover the insured for the rest of their life. A permanent life policy organizes a savings account to accumulate money paid by the policyholder over time. The policyholder may eventually fill that savings account with the same amount of money that would go towards their death benefit, if they live long enough, so the insurance company would basically transfer it back to the policyholder. Policyholders can also borrow from their savings account, but will have to pay it back again to keep their coverage.
An older individual, such as an 71-year-old grandmother who wants to leave a large sum of money to her granddaughter, would make an ideal candidate for permanent life insurance. The policyholder could purchase $100,000 worth of coverage, for example, and she would either pay for the policy all up front or continue paying the premiums into very old age. Permanent life policies are great for individuals who want to leave money to family members after they pass.
Why Choose Term Life Insurance?
Term life insurance is typically targeted towards younger folks because it’s designed to only provide coverage for a set amount of time. Terms are most often 10, 20, or 30 years. If the policyholder dies within the dictated coverage period, their chosen death benefit gets paid out to their selected beneficiary. Term policies are best for those with finite needs.
A 55-year-old husband and father with eight years left on his mortgage and an outstanding balance of $115,000 could be an ideal candidate for term life insurance. He could select a term of eight to ten years with a $100,000 or higher death benefit. Term life insurance can be set up to pay off any debts that have an end in sight, like mortgages or student loans.
Why Choose Funeral and Burial Insurance?
Funeral and burial insurance is basically a type of life insurance marketed and packaged to be a final expense policy. This coverage comes with death benefit amounts of $10,000, $15,000, or $20,000, most commonly, to cover the average cost of funerals today. Premiums for funeral and burial insurance are typically relatively low. Funeral and burial insurance does not require a medical exam or questionnaire for a candidate to be approved.
A 80-year-old who hasn’t set aside any money for their funeral or burial expenses and has existing health conditions could be an ideal candidate for this type of coverage. The individual would not be required to pass a medical exam to be granted coverage the way they would for other types of life insurance. Funeral and burial insurance provides a simple solution for those just looking to cover end-of-life expenses while paying an affordable rate for coverage.
Is One Type of Life Insurance Better Than Another?
The needs of life insurance customers are highly individual. It really depends on what you want the coverage to do for you. All forms of coverage have advantages and disadvantages. For example, though funeral and burial insurance can provide an affordable solution to covering final expenses, you might actually end up paying too much for your policy since its rate is not determined by your current health conditions the way other life insurance premiums are.
Life insurance overall responds to the universal need to dispel the fear of how one’s funds will be distributed after they pass, and also how their family or outstanding debts will be provided for and taken care of. To choose the type that works best for you, you’ll need to consider what you want your policy’s purpose to be. An independent insurance agent is a great ally to help you determine which type of coverage will cater best to your individual needs and desires.
Here’s How an Independent Insurance Agent Would Help
When it comes to helping families secure the right coverage for their final expenses and everything else, no one’s better equipped to help than an independent insurance agent. Independent insurance agents search through multiple carriers to find providers who specialize in life insurance, deliver quotes from a number of different sources, and help you walk through them all to find the best blend of coverage and cost.
TrustedChoice.com Article | Reviewed by Paul Martin
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