The Importance of Life Insurance
Life insurance can provide financial security for your loved ones, allowing them to pay off debts and support their family without stress.
It also helps ease funeral expenses when the primary wage earner in your household dies. That could be a significant burden on your family during a difficult time.
It Provides Financial Security
Life insurance is a good way to make sure your family isn’t left in the dark should something happen to you. It also provides a tax-free cash payout for your loved ones.
The best part is that you can customize a life insurance policy to your specific needs. For example, you can choose a more affordable term life policy or opt for a permanent product that will offer a hefty payoff in the form of cash value growth over time.
The most important thing to remember about any type of life insurance is that the cost will vary based on your age, lifestyle and current health condition. If you’re unsure about which type of policy to purchase, you can always consult a financial adviser for advice. The one-on-one meeting with your advisor will also give you the opportunity to review all your available policies, as well as your other financial products and services. The more you understand your own situation, the better equipped you will be to meet your future goals.
It Insures Against Critical Illnesses
Life Insurance insures against critical illnesses, such as cancer, heart attack and stroke. These health problems are not something that people want to happen, but they can be devastating if they do.
The cost of medical treatments and rehabilitation can often reach tens or hundreds of thousands of dollars. Without coverage, these expenses can leave family members in debt and with a loss of income.
Fortunately, most insurance policies have a critical illness rider that can help with these expenses.
The critical illness benefit is paid in a lump sum that can be used as the policyholder sees fit. This money can be used to pay for medical bills, home or vehicle modifications, travel costs and more.
It Insures Against Death
Life insurance is a contract between you and an insurer that pays a death benefit to your beneficiaries upon your death. This benefit typically replaces your income and helps cover financial obligations, such as mortgage payments or college tuition for a child.
Natural deaths, such as dying from a heart attack, cancer or old age, are also covered by most life insurance policies. You may need to disclose any preexisting conditions you have when applying for a policy.
Accidental deaths, such as car accidents or drowning, are also covered by some policies. You can add accidental death coverage as a rider to an existing policy or buy standalone coverage.
Suicide is usually covered by most policies, but some may not pay out if you commit suicide within the first two years of the policy. In addition, if you murder your beneficiary, the life insurance company is likely to investigate who murdered you and may refuse to pay out the payout.
It Insures Against Disability
While life insurance provides financial protection against death, disability insurance ensures that you can continue to earn an income if you become disabled. It also helps cover funeral expenses and other debts that you owe.
Unlike most other types of insurance, disability insurance can be purchased individually rather than as part of a group policy. It’s often offered by employers as part of an employee benefits package or by professional associations that buy policies for their members.
If you’re looking for the most robust disability coverage, consider a long-term disability (LTD) policy. This type of policy provides you with a tax-free source of monthly income if you become completely disabled from a covered cause.
Adding a disability rider to your life insurance policy can make it more affordable and help you get the most out of your coverage. These riders require additional underwriting, but they can be a good solution for those who cannot afford to purchase a standalone disability policy.