Life insurance protects the people you love against financial burdens associated with the loss of a family member. It can provide the support necessary to minimize stress and give loved ones the time they need to heal and begin moving forward in life. Generally, the younger and healthier you are, the more affordable life insurance premiums will be. That is why we typically recommend purchasing coverage as early as possible – especially if you have dependents or anticipate future life changes that will create additional dependents.
Life insurance can be used to pay for more than just the cost of a funeral and burial or cremation. In fact, it can be used for nearly anything you deem necessary. Some policies even offer living benefits in addition to death benefits. Examples of common life insurance uses include:
- Final expenses
- Medical bills
- Replacement of lost income
- Debt payoff
- Replacement of caretaker services
- Replacement of home duties
- Payment for future life goals
- Donation to charity
- Leave an inheritance
- Protect your family’s business interests
- And more
Types of Life Insurance Coverage
There are generally two different types of life insurance coverage – term and permanent life policies. Each serves different purposes and can be used in tandem to provide a more complete coverage solution both for today and the distant future.
Term Life Insurance
As the name implies, term life insurance is temporary coverage designed to meet short-term needs. These policies have an expiration date, which could be as long as 30 years or more in the future. In exchange for the limited term, this type of coverage typically provides very high benefits at an affordable price. This makes term life insurance the choice for many people who are interested in providing income replacement for financial dependents during the working years. A 30-year term, for example, may provide financial security until retirement, when your mortgage is paid in full, adult children are financially independent, and you have accumulated enough wealth to support yourself for decades to come.
Permanent Life Insurance
Unlike term life coverage, permanent life insurance never expires so long as you continue paying your premiums according to the terms of your policy. This is the coverage choice for people who want guaranteed death benefits with level premiums, as well as an opportunity to accumulate cash value over time. There are different types of permanent life insurance policies, some of which offer additional benefits, such as the option to increase your benefits at select times or the option to adjust your premiums as your finances change over time.
How Much Life Insurance Do You Need?
There is no place for guessing when it comes to life insurance coverage. It is important to know exactly what type and how much coverage you need to achieve your goals for today and the future. There are many questions to ask when calculating the amount of life insurance to purchase. Examples include:
- Does your family have a debt burden?
- Does your family depend on you for regular income?
- Does your family depend on you for lawn care, household cleanup, or other similar services?
- Does a child, elderly parent, or disabled family member depend on your care?
- Are you saving for goals that affect another family member, such as college tuition or a spouse’s retirement?
- Do you wish to leave a financial legacy?
- Does your family own partial interest in a business?
- Will your coverage needs change in the future?
- Do you wish to use your life insurance to grow wealth?
These are only a few examples of the types of questions you should ask when choosing your life insurance policy and coverage amount. Luxor Insurance and our team can help you add up your actual coverage needs down to the smallest details, even accounting for inflation.
Private Life Insurance vs. Group Coverage
Many businesses and organizations provide employees and members with access to group life insurance benefits. With group coverage, there is usually an affordable group rate and no required health assessments. However, there are also some caveats.
First, the employer or organization generally controls the terms of the coverage as well as the coverage amount. Often, that means the coverage amounts offered are very low – sometimes as little as two or three times a yearly salary. Secondly, life insurance coverage through a group policy may become void if you lose employment or become inactive with the organization. Not to mention, the employer or organization could choose to cease offering group coverage as a benefit at any time.
Comparatively, private life insurance provides you more control over your policy. You choose the type of coverage, the terms, the amount of coverage, and any optional riders you want to add to the policy. Your coverage is custom-tailored to fit your needs – not the needs of a group. Furthermore, your policy will be dependable, continuing to provide coverage even if you change jobs.
Why Use an Independent Agent?
There are two types of agents – captive and independent. If you work with a captive agent, it means the agent only works for one insurance company, which severely limits your options for coverage. An independent agent, on the other hand, can provide you with life insurance quotes from multiple insurance companies, opening up a network of coverage solutions to choose from. Brad Seufert is an independent Indiana life insurance agent, which means you will have access to competitive rates and helpful guidance as you select and purchase life insurance policies for your family.