Whether you’re just starting your family, the children are heading off to college, or you’re enjoying your grandchildren, your insurance needs should be reviewed from time to time. As your situation changes, you may need to adjust your coverage to meet new needs or even drop coverage that no longer serves a purpose. You wouldn’t want one of life’s little surprises to catch you, or your family, unprepared.
Life insurance is the first type of policy that springs to mind when most people think about making sure their families are taken care of if something should happen to them. Many people don’t want to think too hard about it, but unfortunately, no one knows when tragedy might strike. While you can purchase life insurance at any age, it is particularly smart to start a policy at a young age to take advantage of the very low rates offered to that age group.
Some people don’t like to think about life insurance because they feel it’s too complicated. They’re not sure what kind they need or how much they should get. There are really only two kinds of life insurance. Term life insurance is the simplest to understand and the least expensive. You pay the premium monthly, quarterly or yearly, depending on your policy. If you die while the policy is active, your beneficiary receives the death benefit as long as no conditions of the policy were broken. There is no cash value with a term life policy, and the premiums continue until the policy ends or a benefit is paid.
The other type of life insurance is a whole life policy. This policy is more expensive, but it builds cash value that you can borrow against or even cash out. It may also pay dividends that can be used to purchase additional coverage, reduce your premiums, or be received as cash. If you choose to reduce your premiums with the dividend payments, over time your premiums may be eliminated. Term and whole life insurance policies may be slightly altered and given another name, but they will still be some version or combination of these basic forms.
It can be a little tricky to determine exactly how much coverage you need when shopping for a life insurance policy. While there’s no right or wrong way to determine your level of coverage, you should take a few things into consideration. Think about how much your funeral expenses will be, how much debt you will leave behind and how many years you would like your family to have the same level of income they now enjoy. If you have children, you might want to cover their college expenses as well.
Financially speaking, it can be even worse for your family if you have a catastrophic accident and become disabled. In the case of a death, they would receive the death benefit from your life insurance policy, but a disability could leave you with ongoing medical expenses and no source of income. Of course, they would rather have you here with them than receive any death benefit. Protect your family’s future with a disability policy and accident insurance in addition to your life insurance coverage. You can purchase various levels of disability coverage that will ensure that you receive benefits if you are no longer able to work.
Even though you may have a life insurance policy that would cover your final expenses, you may also want to add funeral insurance. These policies will allow you to lock in your funeral costs at today’s prices. In addition, you can plan your final arrangements down to the last detail. This kind of planning will allow your loved ones to have time to mourn your loss instead of trying to make important decisions when they are in crisis. Anyone who has been through this experience will tell you that it makes a big difference to have a plan in place.
Courtesy of ARAcontent
