Life insurance can be a great asset to protect your family if something happens. Life insurance provides you with the coverage and financial resources you need in times of difficulty. Life insurance helps ensure that your family will be cared for if something happens to you.
Deciding if you need life insurance or the type of coverage might be a hassle, but don’t worry! In this blog, we will discuss why life insurance is important and how to choose the right policy!
Is Life Insurance Worth It?
The answer to this question is yes! Life insurance can provide financial security if something happens to you. It can help pay funeral and burial expenses and cover debts such as mortgages or outstanding car loans. Moreover, life insurance can provide a steady flow of income to your family so they don’t have to worry about making ends meet.
Why Is Life Insurance Important to Have?
Life insurance is important because it safeguards your family from financial losses if something happens to you. It supports paying off debts, living expenses, and medical or final bills.
Remember that life insurance gives you money when you need it the most. A life insurance policy can provide you with a set amount of money if required. If you pass away, your family will receive the policy payout immediately. Moreover, the death benefit is typically exempt from federal income taxes.
Benefits of Life Insurance
The biggest benefit of life insurance is the peace of mind it provides. Knowing that your family will be cared for if something happens to you gives you a sense of security. Other benefits come with the different types but commonly they include:
Cash Value Buildup Over Time
Many life insurance policies will accumulate cash value and can be used later in life for educational expenses or retirement. With your Whole Life policy, the premiums you pay will result in a guaranteed growth of cash value that is tax-deferred and can assist you in achieving different financial objectives, such as:
- Make up for your retirement income.
- Pay off a mortgage.
- Protect existing assets.
- Establish an emergency fund.
Tax-Free Cash Value
Withdrawals and loans from certain types of life insurance policies are not taxable, even if the death benefit is paid out. Your beneficiaries can receive the full benefits of your life insurance policy without federal income tax deductions.
Legacy Planning
When getting life insurance, you can choose who should receive the money after you pass away. This is called a beneficiary. It’s common for people to use life insurance to provide for their family and pay for expenses like education. If you have children, life insurance can help cover the cost of childcare and college tuition in the future. You can also leave your death benefit to a charity or another cause you care about.
Reduce Stress
Losing a loved one is tough and can be even harder if there are financial worries, like paying bills and replacing their income. Although life insurance can’t fix everything, it can offer some support for your family during this hard time.
Health Benefits Come with Life Insurance
Life insurance riders are optional additions to your insurance coverage that can provide important health benefits. They offer financial support in case of serious illness, disability, or the need for long-term care. Although they provide additional protection, they can increase your premium. Several commonly used riders for life insurance policies, such as waiver of premium, accelerated death benefit, critical illness, and long-term care coverage.
How to Choose a Life Insurance Policy?
Selecting the appropriate form of life insurance may be difficult, but it is a critical choice, and it is as important as selecting the right insurance company. These suggestions can assist you in narrowing down your life insurance options.
Term Life Insurance
According to the Insurance Information Institute (III), you should consider term life insurance if you are looking for a cost-effective way to protect your family in the event of death. Term life insurance is effective for a set period, typically 10, 15, or 20 years. The lower premiums make it a good option for people who want coverage but do not need it long-term.
Given your budget, it is recommended to opt for term life insurance which offers a lower rate per thousand death benefits than permanent life insurance. However, it only pays if you pass away during the policy term, and the coverage ends after the term if you’re still alive. It also doesn’t accumulate cash savings like permanent life insurance.
Permanent Life Insurance
On the other hand, permanent insurance is an ideal form of protection if you are looking for lifetime coverage. Whole-life policies provide cash value growth, which you can use to help pay your premiums. It also provides your beneficiary an immediate tax-free death benefit if something happens to you tomorrow or in 60 years.
It is possible to borrow these funds even with poor credit. The loan is secured against the death benefit, meaning that if you pass away before paying it back, the insurance company will take what is owed before giving the remaining amount to your beneficiary.
Universal Life Insurance
Universal life insurance is another form of permanent life insurance. It offers more flexibility than whole-life policies and allows you to adjust premium payments and death benefits as needed. Universal life policies also provide cash value growth that lets you borrow money, pay for premiums, or withdraw funds if necessary.
Work with Pronto Insurance!
Life insurance is an important form of financial protection for your family. It can provide a flow of income to your loved ones and cover outstanding debts like mortgages or car loans if something happens to you. Selecting the right amount of life insurance and the type is more beneficial for you is a must!
At Pronto Insurance, our experienced advisors have the expertise and knowledge to help you find the best solution for your needs. We offer free, no-obligation quotes, so that you can compare plans without commitment. Request a personalized life insurance quote today and protect yourself and your family!
