Life Insurance can be a huge relief to your family in case of an unexpected emergency. You want to make sure your family is protected in the unfortunate case of your death. Nobody wants to imagine their spouse and kids facing financial hardship while grappling with a huge personal loss. It’s the reason people purchase life insurance.
But it’s never as simple as just buying some life insurance. There are different kinds and terms to consider. And you want to be certain you are investing in what will best protect your family. You also need to figure out how much you actually need.
Read on to learn more about types of life insurance, who should get in and why you need it.
What is Life Insurance?
First, let’s start with a basic understanding of life insurance. Life insurance is a type of insurance a person buys that is paid out on the event of their death.
The life insurance is a lump sum of money paid to your beneficiaries, typically your spouse or children. This money can protect their financial interests. Often when planning for life insurance, you consider the cost of the mortgage, monthly expenses, even the expected needs for college tuition.
Types of Life Insurance
There are a few main types of life insurance to consider. They differ based on the term they are available, cost and whether they grow in value or not.
Term life insurance lasts for a period of time, referred to as the term. When you purchase term insurance, you know upfront the term or length of the life of the policy.
When the term of the policy is up, you no longer have insurance coverage. If the policyholder dies during the term of the policy, then the predetermined lump sum of money is paid. The policy value does not grow over time.
The advantage of term life insurance is the cost. It tends to be less expensive than other insurance options.
Whole life and universal life insurance lasts the lifetime of the policyholder. Unlike term life insurance, it doesn’t expire after a period of time. Both of these types can grow in value if paid into over the course of a lifetime.
Whole life advantages include the fact that it stays with as long as you pay the premiums. Some policies can also work like an investment that grows in value over time. There are some whole life policies that also allow you to borrow money from them for a large purchase, like a house.
Who Should Get Life Insurance?
If there is someone in your life who relies on you for financial support, what would happen to them if you were no longer alive? Would they be okay financially?
If the answer is that they need you and your income for support, you are a person who should be getting life insurance. If you have a spouse or dependent children who you support, life insurance could keep them financially secure in the event of your death.
How Much Life Insurance Do I Need?
This is not an everyday purchase and for this question, it’s a good idea to seek professional counsel. Insurance professionals can help you to calculate your life insurance needs.
Generally speaking, you should consider how much debt you would leave behind. You should also consider getting enough insurance to replace income and keep your loved ones financially secure.
Meeting Your Insurance Needs
Nobody wants to think about their own death. More importantly, you don’t want to imagine your loved ones struggling because you are gone. Life insurance helps guarantee financial security for those who love and depend on you.
Do you need life insurance? Wondering what type of life insurance is right for you? We can help you find the best plan to meet your needs and protect the interests of your family. Contact us today and we’ll help you look at your insurance needs.