Life Insurance? Isn’t That Just For Old People?
If there’s one thing more boring than mortgages, it’s life insurance. So, we get it if most people don’t get excited about talking about life insurance policies. We promise we’ll try to make this post as exciting as possible.
But, it’s just for old people, or people who have high-risk jobs, right? Think again!
Life insurance is important for everyone, and there is no better time to purchase life insurance.
Who Needs Life Insurance?
If you are living and reading this post, then the simple answer to that question is yes. If you have anyone that depends on you financially—children, a spouse—life insurance is a really good investment.
Have a mortgage or other debts that your loved ones may end up responsible for if you die? Get life insurance.
For younger adults, life insurance may be even more important because you likely haven’t amassed enough savings to cover future expenses, like your child’s education, your burial or funeral costs, unexpected medical expenses and so on.
What Types of Life Insurance Are There?
While life insurance is good for everyone, what type of insurance you decide upon will depend on what you can afford and what your life situation looks like.
Term Life Insurance
Term life insurance is usually the best option for most people. In a term policy, you’ll pay a premium every year for a defined term, typically 10, 20 or 30 years.
If you pass away during your defined term, your insurance company will pay a predetermined amount to your beneficiary, the person whom you’ve decided will receive the benefits of your policy.
Like other types of insurance, if you don’t use it during your defined term, your insurance company keeps the money, but at least you can sleep well knowing your loved ones will be taken care of if something does happen.
Permanent Life Insurance
Permanent life insurance provides coverage for life and allows you to earn tax-deferred cash. It remains in effect for as long as you pay your premiums. This type of insurance is usually more expensive than term life insurance and can come in three different types:
Term to 100: These generally have consistent premiums over the duration of the policy (until you turn 100), but no cash value.
Universal Life: This type of policy includes insurance and investments. You can accumulate wealth tax-free and even withdraw or borrow from your policy (with tax implications, of course).
Whole Life: These plans have the same premiums over the duration of the policy (until you turn 100) and guaranteed cash values, but will also generate an annual dividend.
Is The Insurance Provided by my Employer Enough?
You probably don’t remember signing all of those forms when your employer hired you, or the line item on your pay stub that pays for your employee life insurance. Who really reads those documents line by line anyway?
The costs of buying into an employer life insurance plan are pretty minimal, but it may not be enough to cover your specific needs. Take a look at what you’re actually covered for and decide if that will be enough to protect your loved ones for five years. If not, you may want to consider buying additional insurance.
I’m Convinced. Where Can I Get Life Insurance?
While we have you here, this would be the perfect opportunity to tell you about our sister company, Home Auto Life. And you guessed it, they offer life insurance!
More importantly, our brokers with Home Auto Life will look at your current life insurance policy(s) and help you figure out if it’s the right type for your situation, or if you could save on premiums by moving to another insurance provider.