Table of Contents
- What is Family Life Insurance?
- Top Reasons to Get Family Life Insurance
- What Does Family Life Insurance Cover?
- How to Get Family Life Insurance
- How Much Insurance is Enough?
Who would take care of your family’s financial needs if something tragic were to happen to you? Even if you are in tip-top shape and workout every day, there’s no guarantee that something unexpected could happen.
And while most people don’t like to think about it, making sound financial plans for your loved ones in the event of your death can bring greater peace of mind to all.
According to 2016 data and Experian, approximately three out of four Americans will die with $62,000 worth of debt. Credit card debt, mortgages, car loans, personal loans, and student loans were all primary sources of debt. Don’t leave your loved ones to stress over how they’ll cover inherited debts.
What is Family Life Insurance?
Family life insurance is a protective measure that ensures your family’s financial future is taken care of. Similar to most insurance policies, you would select the best coverage for your needs and pay a monthly premium.
As the primary policy owner, you would designate your beneficiary (or beneficiaries) and in the event of terminal illness or death, they would be financially compensated.
Top Reasons to Get Family Life Insurance
Although many people think they might be too young for life insurance, they often forgo it. However, the sooner a policy is purchased, the better.
With so many options to choose from, simple term life insurance is the way to go. This type of insurance policy pays your beneficiaries if you die before the policy is paid off. It costs less than whole term insurance, but there is a limit to the payout date.
Whole life insurance offers lifelong coverage that accumulates cash value, with the possibility of payout dividends. This is the best type of life insurance to buy if you have a child with special needs or you want to ensure your estate taxes are covered.
With the average cost of a funeral hovering at $8,755, add in the cemetery plot, headstone, and internment fees (which could range anywhere from $2,000 to $10,000) and the cost skyrockets to almost $20,000. A trending alternative to burial that many people are considering these days is cremation jewelry. This way you can take your loved one with you through all of life’s experiences even after they pass.
Depending on what state you live in, your heirs might be required to pay estate or inheritance taxes after you die. Allow for this expense when planning your life insurance policy.
Inherited debt can come in many forms, so it’s important to cover your bases with the right amount of coverage. Whether you are paying off credit card debt, a mortgage, or a business owner paying out a partnership,
If you are the primary income provider for the household, you wouldn’t want to leave your loved ones destitute without a way to pay for their livelihood. Make sure you buy the best policy coverage to meet your family’s needs.
Whether you’re a single parent, married, or caring for elderly parents, you want your loved ones to be able to live comfortably if you couldn’t take care of them.
This might mean having enough funds to pay for assisted living arrangements or childcare if your spouse returns to the workforce.
Don’t let your children’s dreams of attending college disappear if you die. The payout from a life insurance policy can help cover college costs or pay off student loans.
What Does Family Life Insurance Cover?
If you are the primary source of income for your family, you don’t want to take any chances. If something unexpected happened to you, how would your family members be able to care for themselves?
The purpose of family life insurance is simple: income replacement for loved ones when a primary breadwinner passes away.
If your partner or spouse is a stay-at-home parent, consider the value they provide as the primary caregiver.
Add up the costs of what it would take to pay a professional for the same services your spouse provides and pay for a policy with the same amount.
Taking out a policy for your children is another option that many are too afraid to consider. However, unless you’ve already set aside funds to pay for an unexpected death in the family, it’s a wise investment.
If you’re one of the 34.2 million people who care for an elderly parent, you should consider adding your parents to your family life insurance policy. If they were to pass away, you could take comfort knowing their burial expenses were paid for.
How to Get Family Life Insurance
The process for acquiring life insurance can seem overwhelming at first, but with careful preparation, it doesn’t have to be. If you know what to expect, it can ease the stress of preparation.
If you’re unsure of where to start looking, ask your friends and family if they can recommend a family life insurance company. Otherwise, the Internet is the perfect place to begin your research.
Shop around for the best quotes
It’s important to remember to ask for a health quote based on your actual health and not that of a person who is the total opposite of you. That way there are no surprises with premium quotes.
If you are concerned about finding coverage if you’re a smoker, Insurance Hero is a great resource for quotes.
Schedule a physical exam
After you select an insurance company, you will be required to have a health exam. This should not cost you anything and is scheduled at your home on your terms.
You will be asked a series of questions, have your vital signs and weight recorded, and be asked to provide past medical records.
Tackle a mountain of paperwork
Although the life insurance paperwork might seem overwhelming, it’s just another step in the process to anticipate. Expect to spend an extra amount of time answering thoroughly.
Wait for policy approval
It should take a few weeks to hear back from the insurance underwriter for approval. Determination factors that influence coverage are your age and health.
How Much Insurance is Enough?
Wondering how much insurance you should get? A good ballpark number should be between eight to 10 times your yearly income.
Top things to factor into the policy amount are if you are a dual income family, the ages of your children, any joint debt, and other added costs such as college, funeral, and medical expenses.
Find Peace of Mind in Planning Your Family’s Future
We hope our life insurance planning guide helped give you the confidence to make an important decision for your family.
Contact us and let us know how your experience searching for a policy went.