Do I Need Life Insurance

Life insurance is designed to help ensure that your loved ones will be financially secure.

What is life insurance? At its core, life insurance is a product designed to help protect people who you are financially responsible for in the event of your death. A life insurance policy is a protective contract between you (the insured) and an insurer (insurance company). This contract is intended to provide direct financial benefits, known as death benefits, to the person(s) of your choice if you should die during the period you elect to be covered. The individuals you designate to receive death benefits are referred to as beneficiaries. The amount of benefits paid to the beneficiary (or beneficiaries) is determined by the amount of coverage that you elect to purchase.

The origins of insurance stretch back thousands of years to ancient societies. But, the basic tenets of insurance haven't changed much since then: A group of people invest a portion of their income into a proverbial "pool of funds" to help protect something of value. These funds are kept in reserve and managed by the entity responsible for the "pool". If one of those investors suffers a loss or damage to their protected asset, they are entitled to a sum of money to compensate for the loss. An insured individual has the ability to make a "claim" on their agreement with whomever they purchased their protective policy from. All of this works because it is highly unlikely that each contributor to that "pool of funds" would all make a claim at the same time. Most people are familiar with this type of an arrangement from purchasing motor-vehicle or homeowners insurance. Life insurance operates under the same fundamental principles.

How much does life insurance cost?

The price you pay for life insurance is determined by a number of factors including how much coverage and what type of policy you may need.

People applying for life insurance may be asked personal, lifestyle, and health-related questions by a licensed insurance agent (and sometimes a medical examiner). This information, along with the use of actuarial tables, helps insurers place you into a "rate class". A rate class is a classification, used to by life insurance companies, to determine which products are available to you and at what prices.

Do I need life insurance?

If you have anyone who depends on you financially, you might need a life insurance policy.  If life insurance is about protecting what and who you love, then anyone that fits one of these categories may want to consider a policy:

  • You're married
  • You have a domestic partner
  • You have a spouse and kids
  • Youre the primary breadwinner
  • You're single with kids
  • You have a home
  • You own your business
  • You have student loan debt
  • You're retired

When to buy life insurance?

Life insurance is suitable for most people regardless of age or situation. However, it's often suggested that you should consider buying life insurance early - maybe even before you think you need it. The reason for this is that age is a key factor in the cost of your premiums. The older you are, the higher your premiums are likely to be. Of course, depending on the type of life insurance, other factors may be taken into consideration, such as health history. However, if you are young and healthy, there may not be a better time to purchase your first life insurance policy.

What can life insurance be used for?

Life insurance policies can help protect the important people in your life from financial struggle if you were to die prematurely. These are the most common uses of life insurance:

  • Paying for funeral expenses and medical bills
  • Covering mortgage payments and rent
  • Paying off outstanding debts that include student loans, credit card bills and car payments
  • Paying for childcare costs if you're a stay-at-home parent or a parent who must enter the workforce
  • Saving for college tuition expenses for your children
  • Contributing to an inheritance for your children or a retirement account for your partner

Not everyone has the same financial responsibilities. So, no one type of coverage is inherently better than another. What's most important is finding the solution that works best for your personal financial situation. You can put your mind at ease knowing that if you do need life insurance, you've taken steps to help protect your legacy. Speak to one of our licensed agents to determine what type of life insurance policy is best for your family and begin the application process.

Help protect your family with Life Insurance!