You need homeowners insurance if you own a home. You need auto insurance if you drive a car. But what about life insurance? If you haven’t purchased this coverage yet, it may be because you’re not sure who needs life insurance – more importantly, you’re not sure whether you need it.
People with family members who depend on them need life insurance.
Although there’s a wide range of variation in the policies available, life insurance is best known for the death benefit. When the insured dies, money is paid to the named beneficiaries, often the surviving family members.
This death benefit can help the surviving family in numerous ways:
- It can cover funeral expenses.
- It can cover medical expenses accumulated before the insured’s death.
- It can cover mortgages, taxes and other debts.
- It can give the family a source of income after the loss of an earner.
Life insurance is a difficult topic for most people. After all, few people like to contemplate their death or the way it will affect their loved ones. For anyone interested in protecting the loved ones who depend on them, however, life insurance is a practical concern.
Healthy people need life insurance.
People who are relatively young and healthy will have access to the best rates when shopping for life insurance. Therefore, it makes sense for people to buy life insurance when they are in their thirties or even younger, and before they develop serious health issues, and when they can secure the best rate possible. For this reason, some parents and grandparents even purchase life insurance for children.
If you have health problems, however, do not assume that life insurance is not an option. Different insurers treat various health complications differently and will respond with different rate classes. At Higginbotham, you receive multiple quotes from different insurers to make sure you get the best rate possible. With the right carrier, the premium might be much lower than you imagine.
People worried about retirement need life insurance.
Life insurance can be about more than the death benefit. To understand this, you have to understand the difference between term life insurance and permanent life insurance.
Term life insurance provides coverage for a specified amount of time, possibly 10, 20 or 30 years. With term life insurance, the main advantage is the death benefit that will be paid to the surviving beneficiaries.
Permanent life insurance, however, works differently. As the name suggests, this policy type is permanent – it does not expire after a specified period. It also builds a cash value, and policyholders can draw upon this cash value while they are living. Some policies come with living benefits riders to pay for long-term care or critical illness needs. When the death benefit is paid, it may provide a tax-free way to transfer assets to heirs. As a result, permanent life insurance can be an important tool in retirement planning.
Is life insurance right for you? See how Higginbotham can help.
Wondering how much life insurance you need? Use the DIME calculation.