Reasons to Have Life Insurance

Life Insurance provides a death benefit to pay off the debts, obligations and expenses of the deceased. It can also help to provide a financial safety net for loved ones left behind or can help fund retirement, if used wisely. A financial professional can assist with calculating the amount of coverage needed and exploring available options.

The main reason to have Life Insurance is to protect loved ones from financial hardship in the event of your death. It is important to take into consideration all of the costs that would need to be covered, such as your mortgage, other debts, funeral and burial costs, and income replacement if you have dependents who rely on your paycheck. There are many helpful tools online that can assist with calculating these costs.

Another way to use Life Insurance is as part of your estate planning strategy to leave behind a legacy or funds for family members, charities or other beneficiaries. It can also be a good tool to cover any final expenses such as medical bills, funeral costs and estate taxes.

There are two basic types of Life Insurance – Term and Permanent policies. Term life policies have a set length of time, typically between 10 and 30 years, that the policy is in force. At the end of the term, your policy will either expire or automatically renew based on the terms of the specific plan you choose. Permanent policies, on the other hand, can last your entire life and they have a cash value component that grows over time.

Most Life Insurance policies come with a variety of riders that you can add on at an additional cost. These may include a critical illness rider that pays out if you are diagnosed with a specified serious or terminal illness, such as cancer. Or, a living benefits rider that allows you to access a portion of the death benefit while alive for specific reasons such as a long-term care need or chronic illness.

Other factors that influence the price of a Life Insurance policy include age, health (including the results of a medical exam or questionnaire), and family history. Some insurers offer a no medical exam option, but this typically comes with higher premiums. If you are a smoker, the price of your Life Insurance will be higher as well.

Throughout the life of your policy, you can request a review of your health status and the underwriting process at which point you will be placed in a new risk class based on any positive changes or improved health. This could result in a lower premium, and it is an opportunity to get additional coverage or to increase your existing coverage if your health improves. If you have any questions or would like to learn more about Life Insurance, please do not hesitate to contact us and we can connect you with one of our team members.