If you didn’t come home tomorrow, would your family be able to go on without drastic changes to their lifestyle? What about if your spouse or significant other did not come home, would you and your family be able to continue living your current lifestyle? Would you be able to stay in your home, pay your current bills, pay for college, or even pay for burial?
You cannot predict the future, but you can plan for it.
September is Life Insurance Awareness Month. As this month comes to a close and we start to prepare for our annual winter hibernation, now is a great time to look at your need for life insurance. There are a few different types of life insurance to meet different needs. Let’s take a look at the most common.
Term Insurance-Term insurance is generally the least expensive for the most amount of coverage. It provides coverage for a specific period of time, generally 5-30 years. It pays the death benefit only if you die during the time span of your contract. Some contracts can annually renew after the initial term, some do not. The rate will generally be higher in the next term or year. Some policies will require a new medical qualification, others will not.
Permanent Insurance-Permanent Insurance is a higher premium, but the policy lasts a lifetime. The coverage continues as long as the payments or pay schedule is met. These types of policies build cash value over time. This cash value may be able to be borrowed against, used to pay future premiums temporarily, or cashed out if a policy is cancelled. This cash value will build while the death benefit will stay at the face amount from the policy.
I like a combination of the two. Some permanent and some term will cover your short term and long term needs.
So who needs life insurance?? EVERYONE!
Beside us parents, don’t forget:
Your new born baby is the cheapest person to insure, and you can protect their insurability for a lifetime!
Your college student needs it too. If you cosigned or plan on cosigning on your children’s student loan, you are responsible for that debt even if the child is deceased.
There are several tools to help you figure out what your life insurance needs are, but the most important thing in my opinion is that you can afford it. Something is always better than nothing!
