Buying the right life insurance policy is considered the cornerstone of sound financial planning. A life insurance policy has many benefits that can protect you and your family from unexpected events that arise in the future as well as provide potential financial benefits.
Life coverage can provide you with the following benefits:
Replacement income for dependents
If you die, life insurance can replace your lost income to keep your family from financial ruin. If your income is key to maintaining your family, then you simply must have a plan in place to replace it if something happens to you.
Pay final expenses
Life insurance can cover funeral and burial costs, as well as final medical expenses and debts you may have had as a result of your death. Some policies even allow you to collect the death benefit while you are still living in order to pay for nursing home care for you.
Create an inheritance for your heirs
You can name your loved ones as beneficiaries on your life insurance policy to create an inheritance for them if you pass away.
Make charitable contributions
You can name a charity the beneficiary of your life insurance policy. Tax laws could make this contribution much larger than the cash equivalent donation.
Create a source of savings and earnings
Some types of life insurance can be paid as cash value if the policy owner outlives the coverage term. As you pay your life insurance premiums, the payments will accrue interest over time. This cash benefit can be withdrawn or borrowed at the life insurance policy owner’s request.
There are many types of life insurance and our professional agents will take as much time as you need to help you understand them and to make sure that the policy you purchase fits seamlessly with your other financial planning needs. Here’s a short list of some of the different types of life insurance policies:
Perhaps the simplest form of life insurance, term life is designed to cover an individual for a designated period of time, often a relatively short period of time. With affordable premium rates, term life insurance can provide unchanging annual premiums for 5, 10, 20, and 30 year periods. The premium rates on term life policies are adjustable by the insurance company based on your health and risk factors. Term life insurance does not offer a cash value, it only provides a death benefit. Once the term has passed the insurance ends with no further benefits provided.
Whole life insurance is designed to remain in effect for your entire life. This type of life insurance will accumulate cash values as part of the policy. Because the premiums usually stay the same from year to year, the younger you are when you purchase your whole life policy, the less expensive the premiums will be.
Universal Life Insurance
A universal life insurance policy usually offers both a cash value and a death benefit for policyholders. The premiums are adjustable depending on the changing needs you require. It operates a lot like a whole life policy but typically has much more flexibility for you. The cash value account inside the policy has potential to accumulate value over time.
Life insurance is an important part of your family’s financial planning. Don’t simply rely on the insurance that your job may or may not provide, your company could go under or you could lose that job or change jobs. This is an area of security that you need to control yourself. Our life insurance agents will take as much time with you as you need to help you understand your policy and to help you select the right product for your particular situation. Just give us a call and we can start working to help protect your and your family’s future today.