What is the best way to assure your family’s survival if something were to happen to you? The simple answer is: Life Insurance…
There’s a lot of confusion around the benefits and purposes of life insurance. But at its heart, life insurance is there to help survivors keep their lives intact if something were to happen to the main breadwinner.
Why do you need life insurance?
Life insurance has different value depending on your stage of life…
When you are younger and working, life insurance is there to provide funds to pay off the mortgage, provide income, and pay for education for the surviving family.
As you age, life insurance can be an important part of estate planning because life insurance (structured correctly) is exempt from estate tax!
What are the types of life insurance?
These days, insurance is more complicated and varied just like life itself. However, there are still two main types of life insurance:
First is term insurance. Like the name says, it has a “term” of years which the insurance covers and then it evaporates. It is the least expensive form of insurance if you are under age 50 and the term is often lined up to expire with your retirement date.
Second is whole life insurance. As the name implies, this insurance stays with you for your “whole life.” The chief advantage is that in the years when you most likely will use it, you will be insured. As long as you continue to pay the premiums, it will never be cancelled.
So, what is the cost of life insurance?
Life insurance is paid by the holder in annual or monthly premiums. These premiums come down to a math formula based on the likelihood you will use the insurance.
If you are young and healthy, your premiums are less. The older you are, the higher the premiums. Of course, the younger you are, the longer you will pay the premiums…
There are a host of choices in life insurance and it would make a lot of sense to discuss these with a professional ahead of making a decision.
Of course, we know this is not a fun subject to consider but the fact is, the death rate is still 100% and quite often, the sooner you address your life insurance needs, the less you will spend over your lifetime for the protection.