Do I Need Insurance?



Many Americans need life insurance. The average funeral can cost thousands of dollars. This doesn’t include other costs like unpaid debts, mortgage and outstanding medical bills left after your passing. Could your loved ones afford this? Life insurance will help pay for these expenses.

 

What is Life Insurance?
Many of us don't understand how life insurance works, the types of life insurance, or how our needs change as our lives change.  First, let's look at how life insurance works. Life insurance pays a specific benefit amount upon your death. You choose the benefit amount that is right for you based on your needs. The top four reasons people purchase life insurance are:

 

  • Final Expense Protection
  • Income Protection
  • Mortgage Protection
  • Children’s Education

 

There are two types of life insurance: whole life insurance and term life insurance.

 

Determining Your Needs
Which of the following apply to you?

 

Whole Life
  • Do you prefer a policy that builds cash and loan value?
  • Do you want to leave a financial cushion for your family or money to your favorite organization?
  • Would you lose your life insurance if you lost your job?

 

Term Life
  • Do you have children, a spouse, and/or other family members who rely on your income?
  • Are you on a limited budget and can’t afford to pay a lot in premium?
  • Do you have money set aside to pay for final expenses?
  • Would you still have life insurance if you lost your job?

 

Everyone’s needs and budgets are different. Some people need term life, some people need whole life, and some people need a combination of the two. Review your answers from the list above. Did you have a good mix or were you strong in one? This should give you an indication of your needs. Learn more about term life and whole life

 

Researching Companies
Now that you know what life insurance is, you may be wondering how to choose a company. No two companies are alike. When researching companies, there are several things you should consider.

 

  • Company Stability – A stable company spends its money wisely and is more likely to pay claims. You should look for companies with strong Financial Strength Ratings from industry analysts like A.M. Best Company and Standards & Poor’s
  • Customer Service – You should look for a company you can contact with questions and has methods for you to look up your policy information.
  • Quality Products – No two life insurance plans are the same. It’s important to determine what your needs are and look for a company whose product matches those needs.