Three Reasons you Need Life Insurance Now
Unfortunately, life insurance tends to be a misunderstood financial necessity. In its basic form, life insurance is meant to provide security and assistance through difficult times like the passing of a loved one. But for some reason, people tend to put off considering life insurance until later in life. It is important to realize that life insurance will never be cheaper than it is now. Just as you will never be younger than you are now. Additionally, life insurance benefits are one of the few things that you can pass on to your heirs without being subjected to Federal tax.
Granted, life insurance is not a fun concept considering all of the imposed hardships your remaining family may experience in your absence. This is not helped by the fact that securing life insurance is subject to old outdated processes. Securing life insurance still can take anywhere from 1 week to 15 weeks depending on the amount, type of insurance policy and medical evaluation or underwriting but we cannot stress enough that it is so, so worth it.
Life insurance can be a lifesaver and while the process of securing a life policy is slower than most would like, it can be an invaluable asset when your loved ones need it the most. It’s important to talk to a trusted, licensed professional who can help you evaluate your needs and help you initiate your plans when you need them. Here are three reasons you should incorporate life insurance into your financial plans this year:
Life insurance for your family
Life insurance is a must when it comes to protecting your family. With the average American’s debt exceeding $137,000 in 2018 (and continually increasing) it is important to consider how your family is expected to pay off debt if anything were to happen to you.
A term life insurance policy can provide replacement income, ensuring your beneficiaries are financially supported through the policy benefit.
A policy benefit is a lump-sum payment paid to the beneficiary at an exact point of need. This payment is not federally taxed so the family will receive the expected lump sum of $250,000 or $500,000 or whatever the policy states. A life insurance policy with a death benefit guarantees your beneficiaries will be financially sound according to the amount you determine.
Life insurance to pay off your home mortgage
With life insurance, you can rest assured that your family will have the money they need to take care of your mortgage debt and avoid being hounded by creditors or faced with foreclosure.
Mortgage life insurance is designed specifically around your mortgage debt. The policy payout is often payable to your mortgage company for the balance of what is owed. It is also important to consider routine upkeep and maintenance costs for your home so your family can continue to reside in their home without stress or interruption.
You own a small business
Small business owners and founders may not know the influence they have on their business but their knowledge of day-to-day operations is invaluable. A key person insurance policy can step in and help the business in transition after losing a leader in the company. The company is the beneficiary in the payout with key person insurance coverage. Key personnel typically underestimate their value to the continuation of the business. It is not uncommon for it to take several additional employees over the course of several years for the business to continue through the transition of such a loss. It is important to have the right amount of coverage in place so the business can continue or in the case that the business is put up for sale as the valuation is also impacted by the loss of key personnel and the desire or need for an expedited closing.
If you need guidance in determining what life insurance plans are right for you and your family, contact us today and we’ll help you evaluate your needs. A common reference to help get you started is the DIME method:
Debt
Income
Mortgage
Education
These four pillars are helpful in determining how much coverage is appropriate. Life insurance provides security and peace-of-mind for those who purchase protection as well as those who have lost a loved one. Rethink your options and re-think your insurance with Harris Insurance.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
