Life insurance isn’t always an easy subject to think about, but it’s a necessary one. The good news is the process is likely not as tough as you imagined. You’ve likely heard about some of the options available to you, but you may be able to eliminate a few right off the bat. So, let’s find out the five W’s of life insurance: who, what, where, when, and why.
Who Needs Life Insurance?
The simple answer is: everyone. An important aspect of life insurance is that the primary focus of it is to help protect your loved ones in the event that you pass away. In 2016, the average funeral cost was around $11,000, but that’s not the only expense you’ll be protecting your family from. Life insurance also aims to help supplement your household income in your absence. For example, if one parent works while the other is a stay-at-home caretaker, the family will still need to have the income on which they’ve counted. Additionally, this will give your family time to get over the shock of the tragedy without have to deal with financial stress.
This is a hard topic to think about, but it’s important to your loved ones.
What Kind of Life Insurance Should I Get?
There are many kinds of life insurance out there, which is often why people get easily overwhelmed. While some, like Index Universal Life (IUL) Insurance, can occasionally act as an additional retirement vehicle,they tend to be more pricey and offer more than the basic insurance most people are looking for.
This gives you two popular options: whole insurance and term insurance. Whole insurance will protect you through the end of your life, however, the premiums tend to be higher. Term life insurance lasts for a specific term of time (i.e. 20 years). The premiums are lower than whole life insurance because if you outlive the designated term, you’ll receive no cash value for your payments over the years.
Where Should I Get My Life Insurance From?
This is where things get a little tricky. You can get life insurance through many places. Your first stop should be your employer. Companies often offer a term life insurance option as a part of their benefits package, and these can be very affordable depending on your age and overall health. If there’s no options at your work, consider asking a few close relatives or friends about what they chose. Keep in mind this can get very personal and be uncomfortable, so a safe option is to ask an insurance professional.
Depending on where you do your banking, they might have some good insurance options for you. Additionally, they will be able to help you make an accurate estimate about how much life insurance you’ll need.
When Should I Get Life Insurance?
As soon as possible. The longer you wait, the more you put yourself at risk. This is not only because accidents can happen at any time, leaving your family financially vulnerable, it’s also because something could happen that affects your health.
Should you fall ill or become uninjured and unable to work, it may disqualify you from more affordable life insurance options. Even if you are able, premiums will almost certainly be higher than when you were healthy. Not all life insurance policies require medical exams, but they will need to ask some questions about your overall health.
Why Would I Get Additional Life Insurance?
If you talked to your insurance professional and realized that you’re under insured, there’s no need to panic.There are a simple ways to to fix this.
For example, if you’re insured through your company’s term life insurance, then you might consider getting another whole life or IUL insurance policy. These will protect you for the rest of your days and will be a supplement to any term life insurance you’re currently receiving.
Or, you could do this the other way around. If you currently have an IUL, then consider going for the cheaper option of a term plan.
In any case, getting on the phone with an insurance professional or setting up an appointment should help your feel at ease and give you peace of mind with your
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