Chances are good that the only time you hear about life insurance is when your employer discusses your benefits or perhaps late at night on one of those TV infomercials. Even then, you probably don’t really know what all the fuss is about and what your life insurance policy does or does not cover. While thinking about how to provide for your loved ones in the event of tragedy occur may be the furthest from your mind at this point in time, the earlier you can be prepared the better. Here are five important aspects to life insurance that you need to know.
Buying Life Insurance Is a Sound Financial Investment
Most of us know all about how important it is to save money for our retirement years, such as 401k or IRA accounts, even CDs and U.S. Gov’t Savings bonds, but did you know that buying life insurance also represents a sound financial investment. That financial relief there for your spouse and dependents to protect them in the event something happens to you.
Life Insurance Comes in Two Versions
There are two basic versions of life insurance for you to choose from. Term-life in which you pay a specified premium for a set number of years, 10, 20, 30, etc. With this type of insurance, you and your family are covered only for as long as the term is in effect. Once the term expires, so too does your coverage. Permanent life insurance remains in effect until you die or stop paying the premiums. Term is usually the least expensive of the two.
Life Insurance is More Affordable Than You Might Think
Most people are under the impression that life insurance premiums are quite expensive. Some types of insurance can be rather expensive and the more riders such as burial insurance you add, the more expensive your policy may get. The same applies if you suddenly start to experience major health issues or are a smoker. But providing you are in relatively good health and are not a smoker, you might be surprised at how affordable life insurance can be.
Major Life Events Are a Good Time to Buy Life Insurance
Being an adult is full of major events, including getting married, buying a home, having children, getting a promotion or a new job. Times like these are often quoted as being the point at which many Americans start looking at the idea of purchasing life insurance as a way to protect their families in the event of an untimely death.
You Might Need More Coverage Than You Realize
The average person seems to be under the impression that the only reason for buying life insurance is to cover expenses such as funeral costs and paying off the debts they leave behind. In reality, you can add a burial insurance rider to your life insurance policy or buy a separate policy. Your policy should offer enough coverage to provide for your family, their current needs, and those that are likely to occur in the future such as college. Be sure you talk to your insurance agent about your current life situation and ensure you have ample coverage to take good care of your family in the event of your death.