When and Why You Should Consider Getting Life Insurance

Many people do not think about the importance of life insurance. They usually think that it is something they do not need to consider until they are usually older, have children, or simply even recognize that they are not going to live forever. But this the wrong approach.

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In other cases, people often believe that the insurance provided by their employer will be all that they need. That sort of insurance is usually term insurance, and it is not always possible to take it with you if you leave that employer. Term insurance will only last for a given number of years. The premiums are low, but if you live beyond the end of the term, there is no payment to any beneficiaries.

Term insurance can be a good choice, however, if in conjunction with whole life insurance. Because term insurance is cheaper, a $100,000 with a 20-year term can be purchased for a relatively inexpensive amount. However, when the term ends, the benefit ends. At the same time, a lesser amount of whole life insurance can be purchased as a starting point and added to as your ability to pay the extra premiums improves, thus allowing the individual to purchase more insurance. Therefore, the question of when to purchase life insurance is a relatively simple to answer. Life insurance should be purchased as soon as possible, and don’t worry – it will reach a point where the insurance is paid up.

When this point is reached, the insurance is paid up in full and will be available to your beneficiaries when you die. The earlier you purchase it, the cheaper it will be, and unlike term insurance the premium on life insurance does not increase as you age.

The initial purchase will be based in part on your age, but the premium will be set when it is signed. Additional policies that may be purchased at a later date will base the premium on your age and health. There are certain features you should look for, which some companies offer such as:

  • Guarantee insurability: This feature provides that you will be able to purchase more insurance at a later date.
  • Dividends and interest accumulations: A whole-life policy, again depending on the company, will often pay dividends, which become part of the total death benefit. Most companies offer interest payments on the earned cash value of the policy each year.

But the primary reason why you should buy life insurance? To set up financial security for your family.

Providing such assistance or security for your family in the event of your death is important. No one can predict when they are going to die. Thus, in the case of a married couple where both are working, a death can leave the surviving spouse with a considerable amount of debts to pay.

The insurance benefit can be used to help pay burial expenses and other costs. The benefits can also be used to help pay college tuition costs for children, if you die at an early age. The amount of insurance purchased will depend on the size and needs of the family and the cost of the premium. Many policies offer guarantee insurability options where additional insurance can be purchased at certain intervals without the need for any medical tests or examinations.

In short, there are some helpful things to remember when considering getting life insurance:

  • Purchase insurance as soon as possible.
  • Remember, you can always purchase additional insurance as needed.
  • Whole life insurance reaches a paid-up point where monthly payments are no longer needed, but the benefit is still available to the beneficiary, upon your death.
  • A combination of lower cost term insurance and paid-up fill life insurance will help cover any expenses that may be incurred if you die at a younger age.
  • Talk to several agents before making a final decision. Different companies have their own incentives to attract you. Find the plan that is best for you and your family.

5 Little Known Benefits of Life Insurance Everyone Should Know About

When one thinks about life insurance, one thing does usually come to mind – the death benefit. It’s a bit of a morbid thing to consider, but the death benefit is the sum of money that is paid out to beneficiaries after the life insurance policy holder passes on. However, there are two different types of this insurance, and there are differences that do go along with each kind of the two varieties specifically.

The two types of life insurance are no other than term life insurance and permanent life insurance. Both types of this life insurance do have their own individual perks about them as a rule. Nonetheless, they are still different from each other, and each insurance defines itself accordingly to a person’s needs for them and their life overall.

Term life insurance is a type of life insurance policy that only provides protection for a certain period of time, such as ten or twenty years. It will only pay out a benefit if the insured party dies during this predetermined length of time that the insurance is active. Permanent life insurance on the other hand gives you permanent protection for life. This permanent protection never ends and will continue for as long as you pay the monthly premium on it. Permanent life insurance also accumulates in cash value, but there are a number of things that most people do not know. These living benefits are important to know in that they can allow a person to take full advantage of them or be able to fund some of life’s possibilities.

Here are five other little known facts about life insurance that can help you:

You Can Fund a College Education

The cash values of permanent life insurance increases in value over the course of time. This means that if you do have aspirations of going to college and getting a degree that you can afford it. You can borrow against the cash value of your permanent life insurance to fund your education for college or other secondary education of choice.

You Can Start a Business

If you aspire to be a business owner, it can very well be made into a reality. Banks will not usually lend money to businesses that don’t have any form of revenue yet. Instead, the cash value that is tied into your permanent life insurance policy can serve this purpose. Walt Disney took this route to open up Disneyland. If it worked for him and it can also work for you as well.

You Can Take Care of Your Family

Do you have an elderly parent that needs you to look after them for a while? If the answer is yes, you can tap into your accumulated cash value of your life insurance policy, then take the time off from work to be there to care for your family when they need you the most.

You Can Take Care of Yourself

Do you have a chronic illness? Are you far too sick to do anything for yourself and need help with daily living on the average? If the answer is yes, you can use some of the money from your death benefits to be able to cover these care expenses for your health. You can get use out of your death benefits while you are still alive from your permanent life insurance policy. The remainder of the policy’s cash value will be given to your beneficiary if you die.

You Can Grow Your 401K

You can tap into the overall cash value of your permanent life insurance policy to help cover your first few years of retirement. This will help to let the funds that are already in your 401K to last a whole lot longer.

Not all of these benefits may apply to you, but they are still worth keeping in mind. Even if you do not have a need of them now, they may very well happen at some point in your lifetime. Being prepared and having the funds can make all the difference.