Do you have children? What will they do if something happens to you? While you don’t want to think about dying before you see them graduate or walk down the aisle, unexpected tragedies can occur.
Prepare your family for the worst and sleep more soundly, knowing that their basic needs will be met. All parents need to have life insurance — otherwise, surviving loved ones face financial hardship while they mourn. The sooner you act, the more quickly you can breathe a sigh of relief.
You Don’t Know What’s in Store
You get out your planner every Sunday evening and plot out your week. However, as much as you might avoid the news to protect your mental health, some events remind everyone that you can’t take your comfortable life for granted. People who lost loved ones to COVID-19 didn’t expect an unknown virus to claim lives. On the morning of September 11, 2001, thousands of people reported to work as usual — until the planes struck the towers.
You don’t want to dwell on the uncertainties of life, but planning for the inevitable is wise if you’re going to protect those you love. Consider all the benefits that life insurance provides:
- Pay off your home: Do you pay the mortgage in your household? You want your family to have a roof over their heads, and the right policy can leave enough to pay off the mortgage to provide that security for your surviving loved ones.
- Provide for living expenses: In the wake of your death, you want your loved ones to have time to mourn. Even if your partner can cover all the bills independently, the emotional hit can impact their career. Plus, given the economic uncertainty caused by the coronavirus pandemic, you don’t want to leave a stay-at-home survivor to face a challenging job market alone.
- Leave an inheritance: If you are young, you probably haven’t yet amassed much of a fortune. However, the right life insurance policy enables you to leave your loved ones something besides your music and book collection.
You Can Fit It Into Your Budget
With economic uncertainty abounding, you might think, “The last thing I need right now is another monthly bill.” However, life insurance isn’t as pricey as you think. A healthy 30-year-old male can expect to pay an average of $26 per month for a 20-year term policy.
The younger you are when you buy your policy, the better rate you will receive. Time is of the essence — a 30-year-old will pay more than someone aged 20, and a 40-year-old will pay more than both. It does seem unfair because you typically have a lower income when you first start, too. However, you can look for a policy that offers a term life conversion option that lets you switch to a more expensive — and benefit-rich — permanent policy when your income increases.
You Have Many Options
There are life insurance policies to suit nearly any need and budget. Here are a few to explore.
1. Term Life Versus Permanent
Term life insurance covers you for a specified period, typically from 10 to 30 years. If you die during that time, your beneficiaries receive the full benefit amount. If you don’t, you lose the money unless you convert to a different policy type before the coverage period ends. However, you can investigate a return-of-premium rider that costs you more each month, but which also returns the premiums paid at the term’s end.
Permanent life insurance costs more than term, but it offers improved flexibility, too. Both whole and universal — two types of permanent policies — invest a portion of your premium in high-interest savings or investment accounts. It accumulates cash value that you can borrow against to do anything from paying college tuition for your kids to buying a home.
.2 Joint Survivorship Policies
Are you and your child’s co-parent no longer together — if you ever were? You might consider a joint survivorship policy. In this type of life insurance, you and the other parent are both insured. Your beneficiaries, who are typically your children-in-common, receive the benefit when both of you die, but your surviving partner isn’t eligible.
3. Mortgage Life Policies
Are your children close to or over the age of 18? Do you still owe on your home’s mortgage? This policy names your lender as your beneficiary, meaning your home passes on free and clear — other than property taxes — to your heirs. It’s an excellent choice for families with adult children who want to leave an inheritance but have limited means.
If You Have Children, You Need Life Insurance
If you have children, you must protect them with life insurance. While you don’t want to imagine the inevitable, you need to prepare to avoid leaving your survivors with financial hardship as they mourn your loss.