With inflation and high prices for gas, groceries and rent, you may be trying to find things to cut or eliminate from your personal finances. Is life insurance one of them? As September is Life Insurance Awareness Month, let’s look at why you might or might not need it.
If your family relies on your income, you need life insurance. If you were to pass away unexpectedly, how would you provide for them? As you try to figure out how much life insurance you need, evaluate your current lifestyle. How much do you spend on necessities, like food and clothing? How much debt do you have? What would you need for funeral expenses?
The same is true if you are a full-time parent but make no outside income—you need life insurance. As a stay-at-home mom or dad, you provide valuable services to your family that they would no longer get if you passed away. Who would provide childcare, transportation, meals, etc.?
If you are married but have no children, you need life insurance. The life insurance can help your spouse or partner pay off any debts you owe, funeral expenses or help supplement their income if you are the primary bread winner.
If you are already retired, you need life insurance. Once you are retired, you should consider a policy that gives you living benefits to support you or your spouse if you require extended care or contract a terminal illness. Life insurance can also be a way of transferring wealth to other family members to help pay estate taxes or a mortgage. You can use it to create a legacy for your favorite nonprofit or the local community when you pass away.
Now that we have determined that you probably do need life insurance, how much you need and what type to buy depends on your specific needs and circumstances. Some of the different types include:
Term Life: A low-cost policy that provides coverage for a specific period of time, such as 10, 20 or 30 years but is renewable until age 75.
Universal Life: A permanent plan where premium payments are flexible and death benefits are adjustable. This policy offers flexibility to maintain your policy while increasing, decreasing or skipping premium payments based on changing needs.
Whole Life: A policy providing a guaranteed death benefit and guaranteed tax-deferred build up of cash value with level policy premiums.
If life insurance is not a part of your financial plan, give us a call to chat about which option is right for you! Wondering if you have enough life insurance? Check out this chart to learn more.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice, you should consult an insurance professional. You may also visit your state’s insurance department for more information.