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Do You Need Life Insurance?
Typically, anyone with a family or dependents can benefit from a life insurance policy. Life insurance policies help protect beneficiaries from some of the financial burdens that ensue after the policyholder's death. In many cases, life insurance death benefits help beneficiaries cover funeral and burial costs, mortgage payments and day-to-day expenses.
If you're still unsure whether or not you need life insurance, the following information can help shed some light on the issue.
Determining Your Need for Life Insurance
To determine whether or not you need life insurance, ask yourself the following questions.
- Do you have financial dependents, such as children or your own aging parents?
- Do you have a spouse who depends on your income?
- Are you acting as a caregiver for anyone else who depends on your income?
- Do you hold a significant amount of consumer debt?
- Do you hold a mortgage?
- Do you own a business? Would your business partner be able to continue running the business if you were to pass away?
- Are you looking to expand your savings options or plan your estate?
If you answered yes to any of these questions, you may benefit from a life insurance policy.
How Life Insurance Works
By purchasing life insurance, you gain the assurance that your insurer will pay financial benefits to your named beneficiaries upon your death (as long as your policy is still in force at that time). Life insurance, then, can serve as an important safety net for your family members and other dependents.
If you die while your policy is in force, your loved ones will receive financial support, either partially or wholly making up for your lost income. These death benefits allow your beneficiaries to cover a number of costs, including:
- Everyday expenses
- The costs of your burial and funeral
- Unpaid medical bills or consumer debts
- Estate taxes
- Any other costs your beneficiaries deem appropriate
Finding the Right Type of Plan
There are two main types of life insurance: term life insurance and permanent life insurance.
Term life insurance provides coverage for a designated period of time. This may be 10 years, 15 years, or even 30 years. Term life policies enable you to gain coverage during times you need it most, such as when your children are young or when your spouse is not working. With term life insurance, however, your beneficiaries will not receive a payout if you die after your policy has expired.
If you’re looking for a policy without an expiration date, permanent life insurance may be a better fit for you. These include whole life and universal life plans.
Permanent life insurance policies also accrue tax-deferred cash value, which means they can serve as investment vehicles. It is important to note, however, that permanent life policies are often more expensive and more complicated than term life insurance policies.
As with anything, it’s important to shop around and compare policies. Speak with a licensed agent at 1-800-966-7169 to learn more about your options today.
*Applications for insurance may be subject to acceptance by insurer. Rates and coverage amounts will depend upon the carrier selected.