Life insurance is an important kind of coverage but unfortunately, because it’s not required like auto or home insurance, a lot of people don’t understand how it works.
When you purchase life insurance, you are paying a small amount of money so that if you were to die, the insurance company would pay out a lump sum to your beneficiaries. (The people you choose to receive the money at that time.)
Why would you want to do this? Well for starters, life insurance can pay for expensive funeral costs. Which is an expense that most families would struggle with, especially if it was unexpected.
But it goes much further than that. Life insurance can be used so that a mom or dad could stay home with children without needing to work after an unexpected death. It could also mean paying off a home mortgage, paying for your kid's college in full, and much more. Life Insurance can give your family options if the unexpected were to happen.
The needs of each family will be a little different, which is why it’s so important to work with an agent to determine how much your family needs and to assess what your goals are for the money. We look at things like your current household income, debt, long term needs, and what it will cost to keep these things at a steady level over time.
The problem is that many people are offered a very basic policy through their work (many times less than $5000 in coverage) and never pay much attention to how it works or what they’re getting.
There are several different kinds of life insurance and it’s important to have the right one for your goals. Term life insurance is a popular choice. It’s called “term” because the policy only lasts for a certain amount of time. It may be 10 years, 20 years, 30 years, etc. At the end of the “term”, the policy expires and there is no death benefit paid out after that time.
So if you’re only wanting coverage to last until your children are grown, then term would be a good choice. It costs less overall and would serve a specific purpose. You might need only 20 years worth of coverage.
Keep in mind, you can always roll over your term life insurance if it’s getting close to expiring…but here’s the catch! You’ll have to qualify again. So if you first purchased life insurance when you were 25 years old, the rate will be much lower than it will when you’re 40. (Rates go up with each birthday.) And if you’ve been a smoker or developed any sort of medical condition during that time, your rates will reflect that.
Some people choose to purchase life insurance that lasts their entire life. These policies have many additional benefits and can be a good option as well.
The key is to work with an agent to determine the best coverage for yoru family, as well as one that will easily fit within your budget.
We want to make sure that you and your family have exactly what you need. Give us a call today at 715-598-9924 to discuss our life insurance policy options and get a free quote.