September is Life Insurance Awareness Month, and Brooks, Todd & McNeil wants to ensure that you and your family are fully protected. Read the five questions below and if you answer yes to at least one read on to find out why you may need additional coverage.
- Does your primary life insurance policy come from your place of employment?
- Are you or the person who is the primary policyholder of the life insurance policy nearing retirement?
- Do you or your child/dependent have college student loan debt?
- Have you purchased a new home or business?
- Have you expanded your family?
If you are still reading you likely answered yes to at least one question above.
Some people obtain life insurance through their employer and consider that coverage adequate. While the coverage amounts may be adequate you could run into some obstacles later down the road if this is your only policy. Many retirees will no longer receive life insurance coverage once they’ve left their company. By the time a person has reached retirement age a life insurance policy could be quite costly. Purchasing one when you are younger, even if you also have a policy through your employer, is a good idea. Your policy will be more affordable, will last as long as you need it (depending on the policy you buy), and in some cases may be a wise investment.
Another lesser-known time when it is beneficial to purchase a life insurance policy is when you or a member of your family has college loan debt. Let’s say you co-sign the private lender college loans for a member of your family and before they are able to pay them off they pass away. The lender would consider you, the loan co-signer, responsible for paying off the remaining debt. A life insurance policy on the lendee would help the loan co-signer pay the debt that was remaining and avoid potential financial ruin.
People often purchase life insurance after a major life event, like getting married (protecting you spouse), expanding your family (protecting your children) and buying a home (protecting your assets), but there are other less apparent times, like the ones identified above, that a life insurance policy can offer substantial protection and peace of mind.
What Kinds of Life Insurance Should I Consider?
The type of life insurance you need depends on your goals.
Permanent Life policies offer lifelong protection along with a cash value accumulation on a tax-deferred basis. This cash account can be used for a variety of purposes; from helping you out of a tight financial spot, to providing funds for a personal opportunity, to supplementing your retirement income. Premiums are generally higher than what you would pay for a Term policy with the same face amount.
Permanent Life insurance falls into two main categories. WHOLE LIFE policy premiums remain the same for life, and the death benefit and rate of return on the cash value are guaranteed. UNIVERSAL LIFE offers the flexibility of varying the amount of premium payments and thus the policy’s cash value. It also offers the certainty of a guaranteed minimum death benefit as long as your premiums are sufficient to sustain it. If you do not maintain those minimum premium payments, your death benefit can be reduced.
Term Life policies provide protection for a specific period of time (the term) and are designed for temporary circumstances. They make the most sense when your need for coverage will disappear at some point, such as when your children graduate from college or when a debt is paid off. Level Term policies can provide coverage in increments of five-year periods that can run from ten to 30 year plans. Typically, Term Life insurance offers the greatest amount of coverage for the lowest premium and can be a good choice for young families on a tight budget.
If you have questions about your specific life insurance needs be sure to reach out to a Brooks, Todd & McNeil agent to discuss what coverage may be the best fit for you and your family.