Got a Life? Life Insurance that is
Well, a life insurance policy that is. While easily overlooked and often deemed unnecessary, Life Insurance is extremely important especially if you have a family that depends on you or large amounts of debt.
Before we get into why Life Insurance is so important, let’s establish what it is exactly. Life Insurance is a contract between an individual and an insurance carrier where the individual regularly pays premiums for the promise that the insurance carrier will pay a certain benefit in the event of the individual’s death.
Sounds a little morbid right? But think about it, life is short and you never know what tomorrow will bring. Life Insurance helps you plan for the unexpected. Think about these tough questions:
Are your loved ones okay financially if you are here today, but gone tomorrow?
Will they be able to pay the mortgage, the car note, or the credit card bills?
- Will your wife be able to put your kids through college in ten years without your income?
- What if you incurred significant medical costs before you passed? Who has the money to pay for those?
- Is there enough money for you to be laid to rest in the manner you want or will your family have to scrape together money to pay for the funeral costs?
Your Life Insurance benefit can help pay for all of these costs. If you really think about it, Life Insurance is one of the most unselfish insurance policies out there. You are putting the needs of your loved ones first to keep them in the lifestyle they were accustomed to before your death.
Don’t just take our word for it. Google it. There are infinite amount of resources out there to help plead the case for Life Insurance.
Here is a quick one from a source outside the insurance family: The Motely Fool.
Now that we’ve established the need for Life Insurance, I know the next questions on your mind are what are my options and how expensive is it. The options are plentiful. You have the choices of permanent, universal, whole, and term life policies. The first three have a savings component to them, which tends to make them a little more expensive. With all four types, each insurance company has their own policy forms. Research your options and speak with a licensed insurance agent who can help you wade through all the options. As for price, life insurance can be dirt-cheap! I’ve seen premiums as low as $150 per year for a $100,000 life benefit. Factors that affect premium include the type of Life Insurance requested, benefit amount, and your health status.
Now don’t get worried about your health, I know I did when I recently purchased Life Insurance. But the whole underwriting process is relatively painless. Most likely the application process will go as follows – you will complete a brief application which will result in an indication of premiums and will be submitted to your selected insurance carrier, the carrier may set-up a phone interview depending on your selected benefit amount, and finally a short physical will be performed at the cost of the insurance carrier. (This is a huge bonus as the tests they conduct are expensive yet provide valuable information about your health and you get a copy of the results!). After the carrier reviews all of these pieces, they will determine if the initial indicated premium holds and issue the policy. (Note: Underwriting criteria will vary from carrier to carrier.)
So if you were wondering what you could do to help your family plan for the future, think about purchasing a Life Insurance policy because you never know what life holds right around the corner.