Do I Need Life Insurance? (Yes, Here’s Why)
It’s easy to ignore the need for life insurance as a millennial. Just starting a career or family takes your mind away from the not-so-fun necessities of life. There is no appropriate age, life event or bank account amount that validates purchasing a life insurance policy. If you have debt, are married or plan to share your life with a partner, have or are planning on starting a family, or you are a business owner, you need life insurance. Here are the basics of life insurance and why it matter in your life.
How Does Life Insurance Work?
The best way to determine which life insurance policy is best for you is to work with a trusted life insurance agent. There are a number of choices and policies to consider.
Term life insurance: Pay an annual premium for the policy term, which is typically 20 years. If you die within the term of the policy, your beneficiaries receive the payout.
Whole life: The most common type of life insurance is whole life. This type of policy comes with guaranteed cash value during the life of the policy. A portion of each premium payment goes toward the policy’s cash-value account. The policyholder can withdraw cash after it accrues and use it as desired.
Universal life insurance: For those who desire flexibility, a universal life insurance policy is best. Policyholders can withdraw or borrow cash after it accrues in the cash-value account and can adjust the death benefit amount as needed.
Return of Premium: Return of premium is a form of term life insurance that does not include cash-value features. However, this policy can return an amount equal to what the policyholder has paid in premiums when the level premium period ends as long as the policyholder is still alive and has kept the policy active.
If you’re unsure which policy works best for your current life situation, consider your age, health and who would assume your debt if you were to die.
Why Do I Need Life Insurance?
If you own a home, business or other debt, someone will be responsible for handling those assets and debts after you’re passing. Life insurance ensures that your debt isn’t handed off to a partner or loved one, who is already facing a very difficult situation. There are definite signs you need life insurance:
Liabilities: Your spouse, parents or siblings could be left responsible for your debt. Life insurance allows your survivors to pay off those liabilities and not be left with unpaid bills.
Children: If you have children but do not have life insurance, you’re putting your family in a financial predicament. Your family needs income to replace your salary when you’re no longer around.
Business: As a business owner, if you don’t have a successor for your company, it could likely close or fall on someone who is unable to handle the responsibilities. Speak with an insurance agent about a plan that would include coverage for your business.
Don’t wait to purchase your life insurance policy. Buying early means you’ll likely pay less and build cash value into your policy over time. Contact the TRIS team to get started today!
