Life Insurance Protection
Three reasons to revisit your coverage
Life insurance is something most people don’t like to think about. Besides coming to terms with our own mortality, life insurance can seem complicated or unnecessary but there are some reasons to either take another look at the coverage that you have in place or look into purchasing life insurance for the first time.
1) Your life changes over time
Your need for life insurance can fluctuate greatly over time. Having some form of life insurance is a foundational piece of any family’s financial plan because of the safety net that it provides during difficult times. Adding children and debts such as a mortgage, student loans, or vehicles can increase not only the need for life insurance, but the amount that is needed. Likewise, when the income that a person makes increases it also increases the need to maintain that level of lifestyle for those that they leave behind if something happens.
Many people are able to get life insurance through the benefits that their employers offer, which is a great option for those that can get it. The problem with relying on employer-provided policies is that employment can change and the same benefits might not be provided by the next employer. There are also scenarios where a person can be afflicted with a terminal illness that might not allow them to continue their employment, at which point the policy might not be in effect.
Having a policy that you own and is not contingent on employment is an important way to make sure that you are not putting your family in a situation where they are left without the protection you had envisioned.
2) It could be easier and more affordable than you might expect
Although every individual case is different, the life insurance industry has made advancements toward more user-friendly application processes. A process that used to take weeks and require a medical exam can now be done in as little as 24 hours with no exam necessary. While that is still more of an exception than a rule, the underwriting process for purchasing life insurance has become more streamlined than it was even 5-10 years ago.
Because of the ability to automatically rate and underwrite policies, the costs for life insurance might be less that what you might expect. The average cost of a $500,000 20-year term policy for a healthy 25-year-old female is less than $16 per month. Locking in your rate while young and healthy is a great way to protect the people that rely on you before changes in your overall health could make life insurance more expensive or unattainable.
3) There are living benefits of life insurance policies
Beyond providing a safety net for those that you would leave behind; life insurance can also provide some additional living benefits. There are policies that can be structured to provide income in retirement using the cash value that builds inside of a whole life or universal life policy. Life insurance policies can also be designed to provide benefits for Long Term Care facilities or help pay for at home care once you are no longer able to care for yourself and generally can be done at a more affordable rate than a traditional Long-Term Care insurance policy.
Businesses can use the cash value inside of a life insurance policy to reward key employees and incentivize them to stay with the company or use it as collateral to help grow their business.
Ultimately, the best life insurance policy is the one that you have when you need it but by occasionally reviewing your coverage and position in life you can make sure that the people that rely on you are protected from the worst-case scenario.
Products sold through First International Insurance are not a deposit, not insured by FDIC or any other government agency, not guaranteed by First International Bank & Trust, may lose value.