Do I Need Life Insurance Yet? How to Know What Type of Life Insurance You Need and When to Get it
Friday, August 8, 2014, 1:00 AM | Leave Comment
The primary purpose of life insurance is to provide financial compensation for the insured’s family in the event of his or her death. Anyone who is the breadwinner of a household should give serious consideration to life insurance, even if their income seems small.
Can you imagine a father of four children and a husband of a stay at home mother perishing and leaving his wife and kids behind with no money? This is precisely why life insurance is necessary for many families.
The cost of the monthly premiums are a worthwhile expense considering that the policy can provide extended financial support for a family in the event that the policyholder dies, and will offer peace of mind for anyone concerned about the future of their loved ones.
Read on to learn a little more about the important role that life insurance should be playing in your life.
There are multiple types of life insurance that every breadwinner should consider. It make sense to consider life insurance as soon as a breadwinner has a dependent wife or child. This way, these dependents will be able to maintain a comfortable standard of living far into the future after their provider has perished.
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Term Life Insurance
Term life insurance pays out money to the decedent’s benefactors for a specific amount of time after their death. This style of life insurance usually pays benefits for a maximum of ten to twenty years.
Monthly premiums are typically consistent from month to month. Yet when the initial coverage period ends, monthly premiums usually increase.
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Permanent Life Insurance
Permanent life insurance is typically more expensive than term life insurance. Permanent life insurance includes both universal life coverage and whole life coverage.
Universal life insurance allows the insured party to change their coverage and premiums throughout the duration of the policy.
Whole life insurance has stiff premiums that don’t change during the life of the policy. It also empowers the insured party to obtain lifetime coverage that provides a cash value for savings purposes and a deferment of taxes.
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Group Life Insurance
Group life insurance is also available to support a breadwinner’s dependents. This style of life insurance is usually provided to the employees of an organization.
Sometimes these policies are specifically created according to employee classes, salary multiples, or flat amounts depending on which is most beneficial to each employee.
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Accidental Death Insurance
Accidental death insurance is available to support the dependents of a breadwinner and also the breadwinner themselves.
If the breadwinner suffers an accident and is dismembered, they will be compensated according to the plan’s indemnity schedule.
Most accidental death policies also provide for the insured’s dependents in the event of an accident. If the policyholder dies as a result of an accident, their dependents will receive a significant one-time payment. This type of insurance is ideal for those who work in dangerous blue collar industries.
If you are a newlywed or a proud new parent and your family relies on you for survival, you should most certainly obtain life insurance. This way, you won’t lose any sleep worrying about what will happen to your loved ones if you die or become incapacitated.
After all, you take out insurance on your automobile and home to keep them protected, so why not ensure that those who mean the most to you will be protected as well?
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This article was written by Dixie Somers, a freelance writer who loves to write for business, finance, and women’s interests. She lives in Arizona with her husband and three beautiful daughters.
Dixie got her advice for this article from the legal professionals of the Littlejohn Barristers professional corporation in Barrie who assist clients with life insurance claims and questions.
