Life insurance is one of the most important investments many people make in their life. Yet there are still large numbers of people across the United States who do not have life insurance.
Have you considered what would happen to your family financially if you had an accident, became seriously ill or died?
After one is gone, a life insurance can be the difference between loved ones left behind struggling to get by and them being financially secure. Life insurance is important because it protects the future financial security of you and those closest to you. With a proper protection in place, your loved ones will not have to worry about money at a time money should be the last thing they are worrying about.
Types of life insurance
Here are three types of life insurance that can help protect your family:
Term life insurance:
This is a life cover policy that runs for a specified amount of time, or ‘term’
Whole life insurance:
This is a life cover policy that is in place until you die
Joint life insurance:
This is life cover for yourself and your partner in one policy
Over 50s life insurance:
This life cover is usually whole life policies for people within a specific age bracket beyond 50
Critical illness life insurance:
This cover is sometimes an option to put aside a portion of your payout that you could use if you suffer a pre-determined critical illness
Terminal illness life insurance:
This cover can pay out early if you are diagnosed from a terminal illness, from which you will die within a projected, limited amount of time
Children’s cover:
This insurance is designed to designed to help cover extra cost like medical expenses if your child suffers accidental death or specified serious injury or illness, which could be added, at extra cost to your life insurance policy.
Burial, funeral or final expense insurance:
This cover is usually a small whole life insurance policy that’s intended to pay only for funeral costs and other final expenses.
Mortgage Life Insurance:
Mortgage life insurance is designed to cover only the balance of a mortgage. The death benefit is paid to the mortgage lender, not a beneficiary that you choose.
Credit Life Insurance:
Like mortgage life insurance, this insurance covers a specific debt. This life insurance payout is the balance of the debt and it’s paid to the lender, not your family.
Supplemental Life Insurance:
This life insurance is the type you may have through work, also known as group life insurance. It sets rates based on the group, not the individual. If you lose the job you generally lose the life insurance, too.
What type of life insurance do I need?
The type of life insurance that’s best for you depends on why you need coverage. Life insurance policies come in multiple forms, and the type you need will depend on a number of factors like:
- How long do you need cover?
- How big a pay-out do you want?
- Who is the policy for?
The most suitable type of life insurance policy for you will also depend on your own personal circumstances.
Who needs family life insurance?
Marriage and having children are usually the biggest triggers for life insurance decisions. Therefore, it is not uncommon for people to not seriously consider life insurance until they have a family. It can be very easy to understand the importance of taking life insurance out if you are the sole financial provider for your family.
One’s dependents on a life insurance could include children under the age of 18, partners who depend on your income, or family members of any age who live in the house you are mortgaged.
Life insurance protects your loved ones when you are gone and provides financial security to keep them going. It is not enough to rely on the government to take care of your family when you are gone.
If you have children or anyone else in your life who is dependent on you, then life insurance is a good idea.
But which product is right for you? There are countless family life insurance options, but rather than delving into the various insurance options, start by examining your own living situation.