10 Facts about Life Insurance

Life insurance is an important part of protecting those we love.? However, many people put off buying life insurance out of a sense of denial and invincibility, that they wouldn’t be touched by death. Unfortunately, the opposite is the truth. Life is fragile. Here are 10 facts about life insurance that will help open your eyes.

1. ?Single People Do Need Insurance

Even those without a family can incur debt.? These debts should not be left behind on the shoulders of loved ones who must settle your estate if you were to pass away.? Life insurance proceeds may also help extended family in achieving their future goals.? The money can be put towards educational goals or financial goals of younger siblings or other family members or friends, giving them a head start in life.

2.? Paying Premium Policies

Anyone who claims they can’t afford life insurance is not preparing for realistic future possibilities.? There are several types of life insurance that are affordable for every budget echelon.? For instance, term life insurance is generally very reasonable as far as the monthly payments and can provide a solid financial base for young families with multiple dependents and responsibilities.

3.? Even Non-income Earners Need Life Insurance

Even stay-at-home parents can benefit from a life insurance policy.? If they should die, their spouse will have expenses that were not previously incurred for the essential services that stay-at-homes provide for their families.? There will be daycare costs, cooking costs, house cleaning costs and more for the spouse left behind in having to care for children.? Having a life insurance policy can prevent these costs from becoming a burden to your loved ones.

4. Portable Insurance vs. Non-Portable Insurance

Insurance purchased through an employer is usually very reasonably priced.? However, when leaving a job, often a group life insurance is not portable and must be liquidated.? Individual policies purchased through a company can frequently be portable, though.? Before purchasing a policy, it may be beneficial to determine the difference before purchasing the insurance plan.

5.? Income Taxes

Many people worry that their beneficiaries will be taxed by the IRS for any death benefits in the event of their death.? This information is not factual in every case, however.? Life insurance death benefits are tax free in many cases, as long as it is the proper policy type and is in good standing.? This means that loved ones will not have to deal with a tax burden they are not expecting.

6.? Travel Plans

Traveling does affect life insurance benefits.? If a policy holder dies while in a foreign country, the odds are the insurance company would pay any claims as long as it is not on an exclusionary list. If the country where the death occurs is currently under the U.S. Department of State’s Current Travel Warnings List, however, they may be excluded in the life insurance contract since the person should have exercised more caution in their travel plans.

7.? Converting a Policy

Most insurance policies are convertible.? Changing a term life insurance policy to a permanent policy is usually just a matter of calling and speaking with an insurance representative.? There will generally be an insurance premium increase when this is done though.? While term life insurance is cheaper, a whole life insurance policy has the added benefit of a cash value.

8.? Protecting Your Children

While it may be obvious that young children can benefit from their parents carrying a life insurance policy in the event of the parents’ untimely demise, adult children may also benefit from a policy.? This can help alleviate the costs of paying for a funeral or any final medical bills that may have been incurred, which would normally fall on the shoulders of the executor of the estate—normally the oldest child.

9.? Savings vs. Life Insurance

While a comfortable savings account can be a huge asset if there is a death, most people underestimate the cost of dying.? There are many final expenses that may need to be covered, from funeral and memorial expenses to hospital bills to taxes and unpaid debts.? Having a life insurance policy in place can ensure that there is enough money available to pay these bills.

10.? Using Life Insurance Loans

There is also the additional benefit of using some life insurance policies for their cash value.? By taking out a loan on a certain kind of life insurance policy, there is no tax-penalty and a lower interest rate for repayment.? As long as the policy does not lapse or is not surrendered voluntarily, beneficiaries will still receive the proceeds minus the amount of the loan.

It makes sense to have a life insurance policy in place, because life never promises things will be easy.? Do a quick check through with our easy web quotation form to determine if you are getting the best rates available for your life insurance policy.

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