So, why do you need life insurance?
What often comes to mind when thinking about life insurance is that
you can use it to pay final expenses. You’ve seen the commercials:
Funeral expenses, burial costs and medical bills can add up to a hefty
amount. The last thing you want is for your loved ones to shoulder this
extra burden. Life insurance can be used to plan for these final
expenses. Permanent life insurance is available in various amounts, so you can pick a death benefit that meets your needs.
But there are other considerations to keep in mind. You can use life insurance …
As mortgage protection. Whether you live by
yourself, with a spouse or significant other, you may want to buy life
insurance as mortgage protection. Think about it: You don’t want the
person you live with to be homeless if you die unexpectedly, do you? Term life insurance
can be used to pay off an outstanding mortgage balance. Just select a
term that matches the length of your mortgage payment period. Some
companies even offer decreasing term insurance, which means the death
benefit decreases along with your mortgage balance.
For income replacement. You and your significant
other may have planned for a future based on two incomes, but what if
one of you passes away unexpectedly? Life insurance can be used to
replace the lost income so the survivor can maintain the same standard
of living.
For college funding. Yeah, I know. You don’t have
kids, so this one only applies if you do or if you have grandchildren
you want to help. Have you seen the tuition rates lately? Life insurance
can help fund a college education. If you die, the death benefit may be
invested and potentially grow to the needed amount by the time your
children or grandchildren reach college age. If you have permanent
policies, the cash value may be used to help fund tuition costs. Feel
better knowing that you helped prepare for their future—even if you are
not there to see it.
There are also a few provisions—additional benefits, if you will—that you may not be aware of.
Probate protection. If the beneficiary of a life
insurance policy is a named person and not your estate, the death
benefit is free from probate costs.
Incontestability. After the policy has been in force
for two years, it becomes incontestable, meaning that the policy cannot
be revoked, unless it was fraudulently obtained.
Free from the claims of creditors. In many states,
the cash values of the life insurance policy are free from the claims of
creditors if the policy is personally owned.
So, are you starting to see the need for life insurance? You will
call your agent now, right? Don’t put it off! Remember, the younger you
are when you get insurance, the lower the cost and the easier it is to
get approved.