Imagine one day you are not there for the people who need you the most.
It’s not an easy thing to think about it. But when you pass away, there are going to be financial obligations your loved ones will face alone. You can help your family face this, easily.
You can give your family the money they’ll need when your gone with a life insurance policy.
Even the most basic life insurance policy will help to:
- Pay for funeral expenses and medical bills
- Cover monthly bills like rent, mortgage, groceries, and car payments
- Pay off housing debt
- Pay off student loan debt
- Offset childcare costs if someone has to enter the workforce
- Fund a child’s education
- Provide an inheritance for your children
- Provide a retirement for your partner
Life insurance is a security blanket for the people you love the most.
How Does Life Insurance Work?
Life insurance policies are contracts between an insurance company and a person insured by that company. The life insurance company will pay a sum of money to the beneficiary you choose in the event of your passing.
You can choose any person you prefer to be the beneficiary, even more than one. You can also name an organization as a beneficiary.
The amount of payout your beneficiaries receive is determined by the amount of the coverage you choose. One great benefit of life insurance is, according to current laws, your beneficiary receives the benefit income-tax free.
Should You Have Life Insurance?
When you realize life insurance has the power to create wealth at a critical time, you realize the importance it has.
Ask yourself, If I pass away today:
- Will my spouse be financially secure?
- Will my family lose our home?
- Will there be enough money for my final expenses?
- Will my children be able to continue their education?
- Will I leave my family substantial debt?
If you consider these questions seriously, you’ll have the answer you need.
If I Need Insurance, What Type Should I Buy?
You may have found the terms whole-life and term-life while you’ve been shopping for a policy. They describe the two main types of life insurance.
What is Term Life Insurance?
Term life insurance offers protection for a set amount of time, or term. The length of time your family is protected with a term life insurance depends on the term you choose when you buy the policy. Typical terms are 10, 20, and 30 years.
Term Life Insurance Pros
Typically less expensive than whole life
Can get higher coverage amounts with less premium
You have options for the term of coverage
You have options for the coverage amount
Term Life Insurance Cons
Once the term ends, so does coverage
Does not build cash value
What is Whole Life Insurance?
Whole life insurance offers protection for the insured’s whole life. Your family is protected throughout your life with the amount of coverage you choose when you buy the policy.
Whole Life Insurance Pros
The policy last a lifetime
The rate never increases, regardless of age or health
Builds cash value that you can borrow against
Whole Life Insurance Cons
More expensive than term life
How Much Will My Life Insurance Cost Me?
Your cost of insurance depends on a few factors including policy type and coverage amounts.
Other things that influence the cost of your life insurance policy are:
- Your health
- Your age
- Driving record
- Lifestyle
If you have high risk hobbies like sky-diving or a high risk profession then your risk, and cost of insurance, will be higher than people whose most exciting event is the latest series release on Netflix to binge on.
Because everybody is different, you’ll be asked a series of questions about your medical history and your lifestyle interest. In some cases you will have to undergo a medical examination.
What Does Guarantee Issue Mean?
A very common situation for people between the ages of 50 and 85 is they didn’t buy insurance when they were younger, and they may not be as healthy as they could be. If this is you, then a specialized type of whole-life policy called guaranteed issue whole life could fit your needs.
Guaranteed whole life insurance is designed to be issues with no medical questions and no medical exams. Your rate never goes up, and your family gets protection they will need to handle your final expenses.
Now that you understand the types of life insurance you can understand your options when you call an agent at Michigan Life and Health to discuss your life insurance needs.