No one wants to leave their family unprepared. That’s where life insurance comes in. Getting life insurance today can protect your family’s financial future, especially if you’re no longer around to support them financially.
1. Replace Lost Income
Most people buy life insurance to replace lost income if something unfortunate happens to them. Providing money for your loved ones is critical, and life insurance helps to do just that. The benefit of life insurance can help cover monthly bills, like rent or mortgage, and even help fund your child’s education.
In some cases, people lose an income because the breadwinner has died. That’s where the death-benefit check comes in. However, there are other ways to lose an income. Sometimes, people can no longer work due to their health failing or another legitimate reason. In this situation, a life insurance policy can supplement the loss through living benefits. This feature allows policyholders to add onto most life insurance policies and is very popular. For instance, agent and National Life Insurance policyholder Richard Reyes was diagnosed with Stage 4 cancer at age 45. He received treatments and was unable to return to work. His NLG life insurance policy with living benefits provided funds for him and his family as he miraculously recovered from stomach cancer. He is grateful to have purchased that safety net.
2. Pay Off Debt
Debt can be very burdensome to your family, especially without your income available to help repay it. Life insurance benefits can be applied to paying off debt and help create more financial security for your family. You can also pay off the debt while you are still alive. If you purchase a whole or universal life insurance coverage, you accumulate a cash value over time and can borrow it to pay off debt. In this scenario, you avoid undergoing a credit check with a bank. Also, when you repay the borrowed money, you will not have as high an interest rate as if you received a bank loan. Remember that anything you owe will be subtracted from the death benefit.
3. Pay Final Expenses and Offer an Emergency Fund
Final expenses can be very significant, especially if there are large medical bills and funeral or legal expenses. An emergency fund can cover unexpected bills, such as emergency repairs to your home or car. Life insurance benefits provide cash to help your family cope in a distressing time. The average cost of funeral expenses ranges from $7,000 to $12,000. You might also consider buying final expense insurance to cover these costs and evade withdrawal from the life insurance death benefit. Final expense products are a form of small whole-life insurance. Generally, it is not difficult to qualify for final expense insurance even those senior citizens who are in poor health can receive coverage. On average, the death benefit spans from $2,000 to $35,000.
4. Help Pay for Your Children’s Education
Educating children can be expensive and often requires a long-term strategy. Many people plan to contribute funds each year until they have enough money saved to pay all or some of their children’s education costs. Unfortunately, if something unexpectedly happens to you, there may not be enough time to set aside adequate funds for education. Life insurance benefits can help by creating a lump sum of cash that you can count on to help pay part of your children’s education costs. Typically, policyholders can pay for a child’s college education with life insurance through three actions. They may take a loan against the accumulated cash value. Similarly, to paying off debt, if the policy does not receive repayment of the money, the action results in a reduced death benefit. If your policy does not allow you to borrow funds, you can withdraw cash from your life insurance, but the death benefit would shrink. A more drastic option involves surrendering your life insurance plan. You would no longer have coverage. Choosing this route requires you to have adequate funds to no longer need the life insurance policy or already hold another sufficient life policy.
Life Insurance Questions?
We hope that this information on reasons to get life insurance is useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
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This article was revised on 4/4/24.