One of the biggest worries people often have is the fear of how their family will cope financially if something were to happen to them. Youâ€™ve probably seen the commercials urging seniors and late middle-aged adults to get life insurance to help with those costs. Like the commercials advertise, life insurance will pay out money to your family in order to assist them with expenses related to your death, as well as, potentially make it a little easier for them in the long run, but this isnâ€™t the only reason why you should have life insurance. The commercials are also often misleading when it comes to the questions of when you should get life insurance and how much coverage you should have. This article will answer many of these life insurance 101 questions.
Life insurance can have many forms. While many of the commercials focus on end of life coverage, there are a couple that also mention coverage in case an accident or surgery is needed. Itâ€™s important for you to know that life insurance comes in temporary or permanent policies that can cover you until a certain age or until the end of the policy. Temporary policies are often called term insurance and will cover you until a certain age without proof of insurability, but doesnâ€™t have any real value at the end of the term it covers. Permanent policies, however, typically require a proof of insurability; this comes in exchange for having a savings built up at the end of the policy. There are many other features that can be included in these policies too.
Like any insurance, premium rates take into account all types of factors, but in this instance, age is the most important. Other factors include gender, the overall health of the individual, family medical history, marital status, location, and lifestyle. Women tend to get lower premiums because of higher life expectancy, while those who are smokers or take part in risky hobbies have higher premiums.
Thereâ€™s really one answer to this question, and it comes down to whether you really want to leave your family or loved ones holding your bills. Funerals, increasing debt that can be passed on in estates, and higher cost of living can mean that if you pass, you may be leaving a loved one with your bills making it harder for them to make ends meet. Life insurance can take care of these things for you. Life insurance can cover everything from burial and final expenses for handling the estate, replacing lost income for your family, and/or paying off mortgage and other debt that you may leave behind. The more that these bills are covered, the more that your family doesnâ€™t have to worry about finances on top of losing you.
This is perhaps the most overlooked and misconstrued question of them all. Many people donâ€™t think that they need it while they are single, young, or without family, but the truth of the matter is that if you donâ€™t want to leave your family with your bills, you need life insurance now. If you want to make sure that your family is taken care of, the amount that you have coverage for needs to be higher, which leads to the next question.
While you could certainly add up the cost of what a funeral might cost to the debt you have and the income that needs to be replaced for your family and come up with the decent number, the ultimate question, as with the whole process, is how much do you need for your family to feel financially secure? Itâ€™s ultimately up to you to decide how much you want to leave behind. However, you should think about what financial obligations you have and the cost of the funeral to at least cover those things. If youâ€™re wanting your family to feel more secure, it often depends on your situation. Obviously, if you are married and have kids, youâ€™ll want to have a bigger policy to take care of them. If youâ€™re single with no children or spouse, then you might not need as much. Take a look at the infographic below to get an idea of just how much you should be thinking of.
For help getting life insurance for your family, talk with your local insurance agent Ed Underwood.
This information is brought to you by local State Farm Agent,Â EdÂ Underwood.Â Click here to get a quoteÂ or callÂ 615-771-0700Â to get information on adding your teen to your insurance plan. LikeÂ EdÂ Underwood onÂ Facebook!