Life Insurance

LIFE Insurance

When you are young and healthy, the thought of your death can seem distant and relatively unimportant at your current age. However, death can occur at any time and at any age. When you pass away, you may leave behind loved ones who are dependent on your financial support for their lifestyle. In some cases, a spouse may work to provide financially for the family, but major expenses, such as a wedding for the kids or retirement, may be impacted by your death. You understandably want to provide for your family even after you pass away, and life insurance provides you with the means to do so.

There are multiple types of life insurance that you can buy, and two of the primary options are universal and term coverage. Universal life coverage does not have a term length, which means that it does not expire as long as you continue to pay your premium. It also can accrue cash value over time. This cash value can be used later to buy investments, for retirement and more. Because a portion of each premium payment is applied to the cash account, the premium on a universal policy may be more expensive than the premium for term coverage. Term insurance expires on a pre-determined date. Common term lengths are 15, 20 and 30 years.

With both types of coverage, you may have specific exclusions. These exclusions may dictate instances when proceeds will not be paid to beneficiaries. Both types of policies also allow you to select the benefits that your beneficiaries will receive. For example, you may choose a policy that has $100,000 in benefits, $500,000 in benefits or some other amount. When selecting a coverage amount, develop a plan for how loved ones may use the money. For example, some may use it for monthly financial support. Others may use it to pay off large debts.

Regardless of your current age, now is a good time to set up life coverage. This simple step today could provide your loved ones with the financial means to accomplish goals and to continue to enjoy a lifestyle that they have grown accustomed to.