Plan Ahead for Your Family’s Future with Life Insurance
Thu Mar 23 2023
No one likes to think about passing on from this life, but it is an unfortunate reality we all have to face. The best we can hope for is a long life full of love, laughter, joy, and adventure. Tragedy sometimes strikes, leaving families with a lost loved one well before their time. In those situations, life insurance can help alleviate the financial strain and give families the means to properly grieve without any additional stressors or pressures. There are life insurance options for every family and financial situation so that you can care for your loved ones even after you are gone.
How Does Life Insurance Work?
With life insurance, you are insuring yourself for a certain amount of money for when you pass away. Despite covering yourself, the money is really for those left behind. The amount of coverage you choose is called the “face amount,” which is paid out to your named loved ones, which are called “beneficiaries.” You can select multiple beneficiaries and decide how the money is distributed amongst them, for example 50% for your spouse and 25% for each of your two children. Beneficiaries do not have to be related to you, so if you have a close friend or trusted business partner that you wish to name, you have every right to do so.
Life insurance comes in many different forms, but the two primary options are Term and Whole. Term Life Insurance is a policy with a death benefit and covers a period of time, typically 10 years or more. Whole Life Insurance is a policy with a death benefit that will stay in force as long as you pay the policy. Each life insurance type has its purpose, but there are some considerations before deciding which one is right for you. This is primarily dependent on your financial situation and family’s needs, but you can often combine options to cover everything properly and within budget.
What is Term Life Insurance?
Term Life Insurance is a great option for short-term debts or changing financial situations. Car loans, home mortgages, and small business loans don’t last your whole life and will eventually be paid off. However, if you pass away before the debt is repaid, it can transfer to your loved ones, especially if you have a cosigner. By carrying Term Life Insurance, you can cover each debt for the length of the loan, and not have to worry about carrying too much coverage once debts have been repaid. For example, you can carry a 30-Year Term Life Insurance policy for your 30 year mortgage, and once it has been paid off, you can let the policy expire.
What is Whole Life Insurance?
A Whole Life Insurance policy is important for expenses that don’t change throughout your life, especially those related to your passing. Funeral expenses including a memorial service, casket, or cremation services will be there no matter how you live your life. These things can be quite costly depending on your final wishes, so carrying a permanent policy can be a great way to lock in an affordable price for your life insurance coverage into your golden years.
You may also want to consider your income when looking at life insurance options, especially if you have a partner, child, or family member that depends on you financially. When you pass away, your income goes with you and can leave a financial impact on your loved ones for the foreseeable future. Carrying Whole Life Insurance safeguards your family against loss of your income so they can continue to pay the bills, like rent, groceries, and school expenses. Your loved ones can also mourn your loss without the pressure of moving or going hungry, which allows them to heal while making ends meet.
What is the Process for Getting Life Insurance?
When you are ready to get life insurance coverage, you can get quotes from your local life insurance agent. Life insurance is rated based on your age and health, so the quotes are often a rough estimate based on your preliminary assessment. Once you decide to pursue coverage, you will have to go through underwriting regarding your health status. This involves an extensive questionnaire about your current health and health history to properly determine your classification. In most cases, insurance carriers require a blood test and urinalysis as evidence of your current health status.
The underwriting process can take a few days to a few weeks for final approval, so life insurance isn’t something you can get in a pinch. Additionally, pre-existing conditions can sometimes be grounds for denying coverage, or certain exclusions for paying out the policy may apply. It is wise to pursue coverage in the prime of your life when you are in good health so you can get a better insurance rate that will last throughout your debts or for the rest of your life. No matter what you are looking to cover, it is a good idea to opt for life insurance sooner rather than later to lock in your coverage and protect your family’s future. Even if you are single and have no debts or dependents, your situation may change one day and you may find yourself wishing you had taken advantage of coverage in your younger years.
Get Your Life Insurance at Nicholson & Associates
Finding the right life insurance option for you and your family can be overwhelming and confusing. Our licensed life insurance agents at Nicholson & Associates are here to help you find the best solution so you can protect your loved ones. Contact your local office today to get the support you need to cover your family.