Many people realize the need for life insurance but keep putting it off until it is too late. You may think that life insurance is confusing, expensive and complicated. You may think you don't know enough to make the right decisions for you and your loved ones. Postponing this decision leaves you and your family exposed financially.
Assumption #1: I'll always be able to buy life insurance.
You could develop a health condition that makes you uninsurable or could make life insurance too costly for you.
Assumption #2: I'll get life insurance later when I'm older or have a family.
Life insurance may be needed at all stages of life. Whether married or single, male or female, with children or without, you may have financial obligations that need to be met. Life insurance provides financial security for you and your loved ones.
Assumption #3: My family and I are covered by the group insurance at work.
To meet the future needs of your family, you need to have 7 to 10 times your annual income. Most group term insurance amounts offered by employers won't meet this need. And, when you don't work for that employer any longer, you usually lose that coverage.
Assumption #4: My husband has life insurance so I don't need it.
Women often live longer than men but not always. There are countless stories of men who had to shoulder the family financial burden along with the emotional burden after their wife passed away.
Assumption #5: My family can cover funeral and burial expenses.
Burying a spouse or loved one is the most stressful time in a family's life. Having life insurance can reduce financial concerns for the family.
Take the time now to review your needs and provide adequately for yourself and your family.
Providing when it's most needed
The death of a family member can be devastating to survivors both emotionally and financially. Life insurance can provide cash to help with your family's immediate and long-term needs.
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Immediate needs include funeral expenses, unpaid medical bills and taxes.
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Long-term needs include care for a disabled child or elderly parent expenses and, in general, the chance for members of your family to continue to live the life to which they are accustomed.
Life insurance is not for the people who die, but for people who live. It's wise to explore options while you are still healthy; health problems can make life insurance expensive or unavailable. Three forms of life insurance are most common today:
Term life insurance. This is temporary life insurance for a specific time period (one, five, 10 or more years). It can provide short-term coverage on a limited budget. Term insurance, however, costs more to buy as you get older.
There are two common types of term life insurance:
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Level term: the amount of protection remains the same during the coverage period.
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Decreasing term: the amount of protection gradually declines during the coverage period.
Whole life insurance. Premiums are generally level with cash value growth throughout the life of the policy.
Cash values can be borrowed (with interest charged) during the insured person's lifetime to help meet temporary or emergency needs.
Funds borrowed reduce the death benefit and cash surrender value.
Universal life insurance. This offers many traditional advantages of whole life insurance (such as protection for life), but also offers flexibility.
Coverage amounts and premium payments are flexible to help meet changing needs during an insured person's lifetime (subject to certain conditions).
When you buy life insurance, you buy a promise of protection against financial loss caused by death. The promise is only as good as the company that stands behind it. In today's marketplace, life insurance buyers should be concerned about:
* The financial strength of the insurer.
* Customer service.
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