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What type of coverage do you need?

By: Andrea Moyer

September is National Life Insurance Month and now is the perfect time to ponder, among other things, the state of your life insurance – or the absence of it.  Let's be real – this is not something we're particularly stokedimage of life insurance application to think about until it becomes necessary and then it is often too late.  While our thoughts may be centered on seasonal changes and getting our kids settled into the new school year, I challenge you to think about how your loved ones will be provided for in the event of your demise.

Life insurance policies fall into two camps: permanent and term life insurance.  I'll try and give you the short version in the most concise but comprehensive manner possible before I lose a good third of my audience here: permanent life insurance is simply insurance that you purchase for the duration of your life.  Term life is that which you purchase for a specific time period, say twenty or thirty years.  So how do you know what you need?  Well, that depends on what your needs actually are. 

Permanent Life

Do you want coverage until you die?  Permanent is your answer.  This policy continues until death and provides an inheritance for your beneficiaries.  The money can be used for final expenses, income replacement or whatever your beneficiaries need.

Term Life

This is often the more affordable type of protection and can be purchased in a variety of plans to fit your needs.  I know what you’re thinking: I’m young and healthy. Why should I be thinking about life insurance?  Allow me to provide you with several reasons, outlined here in D.I.M.E. format:

  • Death – It costs money to die.  It costs money to bury/cremate and to memorialize our loved ones.  Consider that $15,000 reflects a recent funeral cost. How will this expense be covered if you or your spouse passes away?  If the answer to that question is anything akin to I don’t know, then please call your insurance agent immediately and ask about life insurance.
  • Income – We all know that the primary breadwinner’s income needs to be replaced in the event of his or her demise, so there’s no real need for me to underscore this.  But what about the stay-at-home partner/parent?  This is for you!  Again, I know what you’re thinking: Why should I worry about replacing my income?  It’s not a significant amount.  I’m a homemaker!  Listen, I’ve been a stay-at-home mom myself and was tempted to think the same thing.  But I implore you to consider not only the income you’d be forced to replace, but also (and more importantly!) you as a person and all that you do to keep your household running smoothly.  How would your partner and family members replace you should you cease to exist?  At one point or another, out of sheer frustration at perhaps not being taken seriously enough, many of us have itemized the various jobs we perform on a daily basis.  We soon realized that if our partners had to pay someone to do what we do, it would amount to a tidy sum.
  • Mortgage – Your home is probably the largest investment you will ever make and unless you’ve just won the lottery, it usually comes with a 30-year mortgage.  Your mortgage needs to be protected in case you’re no longer here, so your family can stay in their home.
  • Education – Many tuition loans are co-signed by parents and grandparents and sadly, educational institutions do not forgive education loans in the event of death.  The debt can be passed on to the co-signors.  You don’t want to add to the  pain of losing a loved one by being financially responsible for their loans.

Life insurance has changed a lot.  It is easy to get and costs have come down.  There are even plans that do not require an exam.  Your insurance agents are here to help answer questions, determine a plan that suits you and put it in place.  Contact your agent today at 877.791.1707 and cross this very important chore off your To Do list.

Also Read: If I Become Disabled, What Happens to My Life Insurance?

Posted 4:15 PM

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