Signs It’s Time to Buy Life Insurance

It’s easy to put off making plans for the end of your life, especially when you’re young. After all, thinking about your own mortality probably isn’t your idea of a good time! In fact, many young Americans don’t have or even think about life insurance unless it’s offered by their employer – but these policies are often inadequate. And what many people don’t realize is that life insurance is definitely something you want to get sooner rather than later, since when you get it will affect your rates and benefit amount. Not sure if it’s the right time for you? There are some simple signs that it is time to buy life insurance! article title inside an alarm clock on an orange background

What Is Life Insurance?

Life insurance is essentially a contract between you and an insurance company. In exchange for premium payments, they promise to pay a lump sum to a beneficiary of your choosing at the time of your passing. This lump sum is called a death benefit. It is most often used for funeral costs or paying off a mortgage or other debts. It can also help to replace the loss of your income. 

Policies are cheaper when you’re young and healthy, so getting one sooner rather than later is smart. Beyond getting cheaper premiums, if any of the situations below apply to you, it’s time to start shopping for a policy.

1. Your Income Helps Support Someone

If you earn an income that helps to support someone, you need life insurance, simple as that!  And the more money you make, the more life insurance you need. As we mentioned, your job might offer you a life insurance policy, but that policy is a base level of coverage and likely won’t be enough. So how much do you really need? You should look for a policy with a death benefit of at least 6 – 10 times your annual salary. That means if your salary is $50,000, your policy should have a death benefit of around $500,000. 

Think of it this way: if you’re part of a couple, you’re most likely planning your life around two incomes. You plan on paying for your mortgage, retirement, and even day-to-day expenses with each other’s incomes in mind. Imagine suddenly losing your loved one and then having to move or completely rebuild your life because you can no longer afford the life you have. That means protecting your partner with life insurance is a must.

2. You Have Kids illustration of family underneath an umbrella on a blue background

If you’re a parent you should already have life insurance. Ideally by the time a life insurance payout comes, your kids will be grown and leading their own lives, but it’s better safe than sorry. It generally takes two incomes to provide for kids. So a sudden loss of income can be devastating, and not just in terms of day-to-day expenses. If the worst does happen, life insurance benefits can be put into a college fund or a savings account to help pay for bigger life expenses that you’d planned to be there for.

3. You Have Debt

When you’re young, you can start racking up some hefty debts that are meant to be paid over a long period of time. You acquire these debts hoping to live a long life and to pay them off long before you’re gone, but you don’t know what the future holds. No matter when you pass away those debts still need to be paid, and they will fall to any family you’ve left behind. 

Your debt balance should play a factor when you decide how much life insurance you need. Theoretically you want to leave enough of a death benefit so that your family can pay off your house and other loans, and not have to double their own debts. Getting a robust policy will keep your loved ones from having financial worries on top of handling your loss. 

The Takeaway 

Life insurance is about protecting your loved ones. It’s hard enough to grieve a loss, and you don’t want to add even more stress to the situation. The best way to find a life insurance policy that protects them is by speaking to an agent. Below we have a list of the top life insurance companies in the nation. All of which offer hassle-free assistance and competitive rates. Shopping around is your best bet, so always check multiple sites to make sure you get the best rate possible. Help protect and provide for your family by checking rates today.

Co-written by Brianna Hartnett

Retiring? Don’t Cancel Your Life Insurance Policy!

You’ve worked your whole life to save money to use for your retirement, and to take care of your loved ones. Now that your retirement is finally approaching, you might be wondering: is it enough? In addition to your savings, do you have a pension or retirement benefits through your former employer, or will you be relying on Social Security – and will it be enough to support your spouse if you are no longer able to? What about if you or your spouse needs long-term care? And will there be any money left for your children or grandchildren? If you’re unsure whether you’ll have enough money for all of these scenarios, a life insurance policy could be the answer. So, if you already have one, don’t cancel it now; if you don’t, you can still find an affordable policy – having one is just as important now as it was when your family was young, and here’s why!

Provides Additional Incomethree plant pots with money growing out of each of them and a hand picking the middle one

If you are one of the lucky ones who will be getting monthly retirement benefits from your employer, you might think that both you and your spouse will be able to live on that money for the rest of your lives, whoever passes away first. But that is not necessarily the case: depending on the type of monthly payout that you chose, your spouse might not continue receiving your retirement income after you die. If you picked the option of a monthly payout based on your life expectancy instead of a “joint and survivor” benefit option, your benefits will only last for as long as you are alive – and most people do not choose the “joint and survivor” option, because it usually means a smaller monthly payout. Life insurance can replace that monthly income, which will help your spouse with the expenses that they relied on your income for. 

Covers Debts

Some of your debts do not disappear when you die, especially if your spouse is a co-signer of the debt. If you’re still paying off your house, car, college tuition, or credit card bills, a life insurance policy will ensure that these debts get paid without your spouse or family struggling. A policy will also ensure that your family can afford your funeral expenses, which will cost, on average, $10,000. 

Leave A Legacy

Hopefully you’ve got a great pension or retirement plan that is allowing you and your spouse to pay the bills, and still have money to travel and enjoy your retirement. But what about your children and grandchildren after you pass away? With a life insurance policy, you can leave a legacy for your family when you pass. 

Cover Your Long-Term Care

older man pushing an older woman in a wheelchair
Life insurance can help cover your long-term care, if you add specific riders to your policy.

Life expectancy is rising, and living longer means you or your spouse might end up needing assistance or long-term care at some point in the future. If you have retirement benefits, they can help pay for your long-term care needs, but what about those for your spouse? There are life insurance riders that you can add onto a policy to help both of you with long-term care in your retirement years. Some of these riders include:

  • Long-term care rider – Helps with expenses including nursing fees and assisted living costs.
  • Accelerated death benefit rider – Pays out a portion of your death benefit while you are alive if you are being treated for a terminal illness.
  • Critical illness benefit rider –  Provides early access to benefits for treatment of certain illnesses.

Supplementing your retirement benefits with life insurance will help you and your spouse have peace of mind knowing you’ll be covered if you need extra care. 

Other Advantages Of Life Insurance

Aside from helping your spouse and loved ones when you are gone, there are other advantages to supplementing your retirement benefits with a life insurance policy. With certain policies you can:

  • Build up cash value on a tax-deferred basis
  • Pay for premiums with your cash value
  • Borrow money from the cash value tax-deferred
  • Receive tax benefits for estates and trusts for your family

What Kind Of Policy Should You Get?5 white doors next to each other

There are many life insurance policies to choose from; choosing the right one for you depends on your situation, how much coverage you want, and your budget. Some policies to look into include:

  • A permanent life insurance policy, such as whole life insurance, which offers coverage that will last your whole life, and will accumulate cash over time. 
  • A term life insurance policy, which is cheaper than permanent life insurance, but only covers you for a specific amount of time (10, 20, 30 years). It can be converted into a permanent life insurance policy when the policy ends, but you might have to pay more for the policy if you renew it.
  • Guaranteed universal life insurance, which is a hybrid of term and permanent life insurance.
  • Joint life insurance, which will provide your spouse with a death benefit if you choose a first-to-die policy, or your family if you choose a second-to-die policy.
  • Final expense life insurance, which will provide benefits for the cost of a funeral and any debts you leave behind. The death benefit amount can be anywhere from $5,000 to $25,000. 

These are just some of the different types of life insurance policies you can choose from; you should be aware of all of your options before making a decision. The best way to choose a plan that will most benefit you and your family is by working with an agent and comparing plans. To get you started, we have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Your retirement benefits will only go so far; by supplementing them with a life insurance policy, you can make sure that you will continue to provide for your loved ones even when you are gone, or that your long-term care needs are met. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.