From King Tutenkamen’s valiant attempt to hoard wealth to take into the afterlife to the legendary quest for The Fountain of Youth, we humans have historically been wishful about cheating our greatest enemy: Death. Modern proponents of Cryopreservation are hopeful that future medical science will offer them a second chance. In the meantime, though, even they have to consider what will happen to those who depend on them when our current medical ability falls short of keeping them alive.
Unlike most types of insurance, Life Insurance isn’t to benefit you: It’s for the people you love who depend on you.
Who Needs Life Insurance?
The beneficiaries of Life Insurance policies are those whose well-being depends on your income or services. Think especially of those unable to care for or provide financially for themselves, such as young children or disabled or aging family members. A spouse whose lifestyle is at least in part dependent on your income should also be considered.
In the case of your death, a Life Insurance Policy can help those who love you to avoid — or at least delay — additional major changes, such as selling off assets or finding other streams of income. It’s not just wage earners who should consider Life Insurance, though. A parent who stays home to care for children would leave a need for child care, so a Life Insurance Policy could help cover those expenses.
How Much Life Insurance Do I Need?
The above question should really be rephrased as follows: “What Kind of Life Insurance Would Best Provide for Those I Love?” You can start by figuring out an amount that would meet your dependents’ needs with this online calculator (or by downloading the app).
It’s estimated that most people who fail to purchase life insurance do so because they don’t believe they can afford it, yet they think it costs at least twice what it actually does.
Once you’ve determined an amount, it’s time to consider the type of Life Insurance Policy that’s best for you.
What Kind of Life Insurance Policy Should I Purchase?
You probably initially (assuming you are young) will want Term Life Insurance. Less expensive and simpler than Whole Life Insurance, it’s best for most people. Basically, your insurance agent will help you calculate how much insurance you need and use your risk factors to determine a premium, then voila! You simply pay your premium each month, quarter, or year, and you’re good to go.
Many financial advisers recommend having Whole Life Insurance priced and investing the difference between the two, in order to come up with the equivalent of an insurance policy that has cash value, like Whole Life Insurance does.
The main benefit over Whole Life Insurance is that if you live to enjoy your retirement years, you’ll have more cash in hand to fund your adventures. On the flip side, Whole Life Insurance does make more sense for some people; for instance, those who know they won’t otherwise invest the difference in the two premium amounts. Since insurance death benefits are tax exempt, they can increase your ability to pass along your savings to your heirs.
The Nicholas Insurance Agency, led by Greg Nicholas, is a family owned business serving the York county, Pennsylvania region. In the insurance business since 1981, Greg Nicholas helps families, businesses and individuals understand the value of different insurance products and make wise decisions when selecting the best insurance products for their specific situations.
Offering exclusively Allstate insurance products, the Nicholas Agency provides auto, homeowners, rental and landlord insurance as well as life & disability, recreational vehicle, motorcycle and personal liability insurance.
For more information, visit our two York, PA locations at Westgate Plaza or York Marketplace or call us at (717) 764-2024.
Image credits: Top © WavebreakMediaMicro/Fotolia; 2nd © Andersen Ross/Blend Images LLC/Fotolia; 3rd & 4th © Graham Oliver/Fotolia.