When you’re young, single, and healthy, you don’t think about life insurance very often. But, this is actually the best time to buy life insurance because it will be more affordable. As you age and develop health issues, the rates and premiums increase substantially.
Generally, people between the ages of 25 and 40 will pay less for life insurance. Of course, you may be waiting until you pay off student loans and other debts or start a family. However, if you pass away before paying off the debts, your loved ones will be responsible for them. Life insurance can help reduce this burden. The death benefit can be used to pay off debts and cover burial expenses.
If you aren’t currently covered, take a look at the 5 life events that will reinforce your need for life insurance.
(1) Marriage
As life partners, you and your spouse will likely share financial responsibilities and depend on two incomes. You should make sure the income is protected. The hardships caused by the loss of income can be significant if one of you passes away. Life insurance should be enough to cover the outstanding amount of any debts you or your partner bring into the marriage.
(2) Purchasing a Home
Buying a home is an exciting time in your marriage, but it will likely involve a mortgage that will take decades to pay off. While a mortgage is considered “good debt”, it is still a significant financial burden. You want to make sure your spouse can continue paying the mortgage should one of you pass away. A life insurance policy gives you peace of mind knowing your family can remain in the home if you’re deceased.
(3) Starting a Family
Although you or your spouse may have insurance through your employers, it may not be enough to provide for your children if one of you passes away. A Whole Life insurance policy can be a solution. While this type of insurance is more expensive, it has additional benefits not offered by other types of policies. Whole Life builds cash value that you can access to help cover the cost of your child’s college education.
(4) Starting Your Own Business
Even small business owners should have life insurance for several reasons. For instance, if you pass away, life insurance proceeds can help keep the business operating. Your spouse or children won’t have the burden of paying the bills or salaries of employees. Remember, however, the insurance premiums are not tax deductible if you’re paying for a personal policy. As a business owner, you should also have commercial or key person insurance to protect your company.
(5) Retiring
Retirement is a milestone everyone looks forward to. But, will you have enough savings or retirement benefits to keep the bills paid? If you have whole life insurance, your policy’s cash value can be used to supplement your income. However, any funds you use will decrease the benefits paid to your beneficiaries if you pass away.
When you have loved ones who could be financially impacted by your passing, you should consider life insurance as part of an overall financial plan.
Types of Life Insurance
Shopping for life insurance can be confusing. Which type is right for your situation? The type of policy you need will depend on several factors. For instance, what you want the coverage to do, how much you need, and how much you can afford. With this in mind, here are the two most frequently purchased policy types to consider:
Term Life Insurance
Term life insurance provides coverage for a pre-determined amount of time. The premiums are typically lower than other types of coverage. Although it is temporary coverage, some companies allow you to extend the term or switch to a different policy. However, the premiums may increase if you choose to extend the term. Term life policies do not accumulate cash value.
Whole Life Insurance
A whole life insurance policy is also referred to as a permanent life insurance policy. This type of insurance guarantees coverage for the remainder of your life. Generally, the policy premiums are fixed for the duration of the policy. The policy will earn a minimum amount of interest and accumulate cash value that can be accessed if needed.
Sandifer Insurance Will Help You Get the Right Life Insurance for Your Needs
If you have questions about the type of life insurance that is right for your needs, Sandifer can help. We have over 40 years of experience in helping clients get affordable, reliable insurance customized for their unique situations.
Sandifer Insurance Agency is a family-owned, local business proudly serving Cheraw, SC, and surrounding areas. Let us help with your insurance needs including home, auto, life, business, and farm insurance.
Contact us by phone, email, or online to get a free quote or to speak with an agent.
Sources:
forbes.com/ – Life Insurance for Business Owners: Types, Tips & More
iii.org/ – What Are the Principal Types of Life Insurance?