Benefits of Life Insurance for Your Family
You’re familiar with insurance. You have auto insurance for your car, health insurance for your well-being and possibly renter’s or homeowner’s insurance for your home. But many Americans don’t have life insurance – often because they don’t appreciate the importance of it! The benefits of life insurance extend to your family or additional beneficiaries of your choosing.
Discover the primary benefits of life insurance and why you should consider a life insurance policy as part of your financial planning.
What Is Life Insurance?
Like any other insurance, life insurance is a contract between you and a provider to guarantee a payment after an unfortunate loss of life. Ultimately, it’s a plan that you can put in place to have some additional protection for your surviving loved ones when you pass.
There are multiple types of life insurance, each with its own costs and benefits, the two most common being term life insurance and whole life insurance.
Term Life Insurance
As the name implies, term life insurance covers you for a specific term set at the time of establishing the policy. If the unthinkable were to happen during this term, your death benefits would be provided to those you chose as beneficiaries. The types of payments are up to you: lump-sum, annuity or monthly payments.
Term life insurance policies are often more affordable but have a hard end-date when the coverage will cease.
Whole Life Insurance
Like term life insurance, whole life insurance includes death benefits for your beneficiaries. The primary difference is the addition of a cash value built up through your premiums. As you pay your monthly premiums for whole life insurance, part of that cost adds to the benefits for your beneficiaries upon your passing.
Without a strict term limit, whole life insurance tends to be more expensive. However, it’s a more reliable option for those who want to guarantee your loved ones are protected from financial concerns related to your passing.
The Most Important Benefits of Life Insurance
Supporting the Costs of Your Passing
Expenses associated with burial and funeral services are an unfortunate reality. Life insurance is the best way to help offset costs that will likely be thousands of dollars.
Funeral costs can add to the emotional wear that comes with the loss of a loved one. By incorporating life insurance benefits into your financial plan, you can help lessen the stress on your surviving family members.
Financial Assistance for Your Family
For those still in the workforce, life insurance can eliminate the worry of what may happen to your spouse or children with the loss of income from your passing. In single-income households, a sudden and unexpected death can turn the world upside-down in a moment.
Life insurance policies can carry financial security to those you care most about. In addition to aiding with the costs of funerals, it can allow them time to grieve instead of having to focus on their savings and upcoming bills.
Managing Federal or State Estate Taxes
Taxes are likely the last thing anyone wants to think about when a parent, spouse or sibling passes. However, any assets or money inherited from death are taxed by the state, the federal government, or both.
Depending on where you live, these estate taxes can be a big shock – especially if you relied on the inheritance to support your life. One of the benefits of life insurance is being able to help offset the taxes associated with state or federal estate dues.
Supporting Charities in Your Name
While life insurance is often one aspect of security for those who have dependents, it can benefit even those who live completely independently. Charitable riders are one common clause that can be part of your life insurance policy.
If you’ve dedicated all or part of your life to working for one or more charities, you may want to help support them even after you’re gone. These policy riders let you name charities to receive a small portion of your benefits.
Charitable riders are relatively new to life insurance and come with several specific restrictions or stipulations. If this is something you’d like to consider, speak with us to discuss your goals!
Peace of Mind
The most notable benefit of life insurance is the simple peace of mind it offers you. Knowing that your loved ones will be financially protected after your passing for their immediate needs can make the idea less stressful.
It’s impossible to predict the future, but it’s easy to understand the needs of your family and dependents. You don’t need an extreme policy to ensure your family is secure in the future, and even a basic life insurance policy may help you avoid some of the stress that comes with being the primary source of income in your household.
Help Planning Your Life Insurance Needs
Life insurance policies are designed with your needs in mind. They’re based on your current life circumstances, age and relative health. We can help you decide on which type of life insurance will best meet with your planning goals, and help you understand how it works. Just contact us and we can find a time to chat!
Contact Iott Insurance for a Quote Today
Iott Insurance has been a part of southeast Michigan for over 50 years. We can help you plan your insurance needs and find you the right policies or plans to protect you.
Or you can visit one of our three offices in southeast Michigan:
Blissfield, MI – (517) 486-4381
Lambertville, MI – (734) 854-4688
Petersburg, MI – (734) 279-2111
Follow us on Facebook for news and community updates