Do I really need life insurance? For most people the answer is “yes.” And for most people it is affordable.
As we move through the various stages of our personal lives, we come to the realization that life insurance is an inherent part of having a sound financial plan. It just makes sense as it provides peace of mind for us and for our family.
The principle of life insurance is quite simple. A person pays small amounts each month so that should they die, a beneficiary of their choice gets a sum of money approximating what they would have earned had they continued to live.
The idea is that if a person dies, their partner and/or children will not be pressed financially where they lose the house, the car or other assets.
How Life Insurance Payouts Help Your Dependents
- Pay off your debts – mortgages, lines of credit and loans (business & personal)
- Make up for the income you provided your family
- Provide for your children’s education, etc.
- Other . . .
Generally, there are three kinds of life insurance programs:
Term Insurance: This is pure protection without investment benefits; it covers you for a stated period of time (usually between 1 to 20 years), and may expire at age 75, 85 or 100, depending on the policy conditions.
If you die during the period the policy is in force, the company pays the death benefit; if you die after it expires, there is no coverage, and no death benefit is paid. Since it provides basic protection, term premiums generally are the lowest of the three types of life insurance but increase as you age.
Permanent Life Insurance: As long as you pay the premiums, the coverage remains in force, no matter what your age. These policies generally offer less flexibility, but some offer financial benefits through the cash value of the policy. Premiums can remain consistent for life (they don’t increase as you age, even if your health deteriorates), or the premiums can vary depending on the plan you choose. Premiums tend to be higher than term insurance when you are younger but will be lower than term insurance when you become older and possibly uninsurable due to failing health.
Combination: This coverage combines features of term and permanent insurance, granting you more flexibility around your coverage, and more choice in investment decisions for the cash value of the policy.
Depending on what stage of life you have reached, your needs will be different, and your life insurance needs will be different, as well.
It is best to review your life insurance at least every 1-5 years to match with current needs or any time you have a significant change of financial position – occupational changes, birth of a child, dependency of elders, etc.
Help Is Here
The decision to buy life insurance can be complex. We commit to helping you understand your options and to secure the very best value to your unique needs.
Request a quote today and we will introduce you to an advisor who will look out for your needs.
A Park Insurance Partner