Unfortunately, your financial obligations are not likely to go away when you die. And while this is an unpleasant reality, there is also a very simple solution: life insurance.
Life insurance is one way to provide some financial support to your family upon your death, whether you have debts to pay or you simply want to provide for your own burial services. The proceeds from a life insurance policy’s death benefit make cash available to pay your debts, final expenses and estate taxes. And it can even be a source of inheritance for your children or heirs.
Who Needs Life Insurance?
It is true that some people have a greater need for life insurance than others, and that marital status, the size of your family, your current and future financial obligations and your career stage, as well as your goals for the policy all play a role in how much and what type of life insurance you need. But do not assume that if you are single or if you are a retiree that you do not need life insurance. Life insurance is very individual and personal, and it is an integral part of preparing for your future and the future of your loved ones. Before you assume, talk to an insurance professional.
Here are some circumstances under which many people need life insurance. You will see that most adults fit in to one of these categories.
- You are married but have no children. Would your surviving spouse be able to pay off your debts and continue to pay for housing and other expenses without your income?
- You are married and have children. Could your surviving spouse maintain his or her lifestyle and save for your children’s future?
- You are a single parent. As the sole caregiver and breadwinner, life insurance is essential to protecting your children’s future should the worst happen to you.
- You are a stay-at-home parent. Could your family replace the contributions you make without a financial burden?
- You are a parent with grown children. Would your surviving spouse be able to maintain his or her lifestyle without you? Do you want to provide some form of inheritance for your children?
Types of Life Insurance
There are two main types of life insurance: term life insurance and permanent life insurance.
Term life insurance provides protection for a certain period of time, such as 10, 20, or 30 years. As the simplest form of life insurance, term insurance lets you provide for some final expenses and income replacement for your surviving spouse and children.
Permanent life insurance is a complex financial tool that can help you achieve a variety of goals. Permanent life insurance provides more than a death benefit; it offers a long-term savings or investment component with a cash value. Whole life, universal life and variable life are all examples of permanent life insurance.
The cost of life insurance depends on the amount you need, the policy type that you choose, your age, your health and certain lifestyle factors (smoking, risky activities, etc.).
The only way to be sure that you are purchasing the right type and amount of life insurance is to work closely with a qualified insurance professional who can help you assess your needs and your goals for the policy, and can balance those goals with your budget.
We can provide expert advice on individual life insurance in Georgia and Tennessee. Do you have life insurance but you are not sure if it the right policy for you? Is this your first time thinking about life insurance?
Posted on Mon, March 27, 2017
by Starr Mathews filed under