Why is Life Insurance Important?
What is Life Insurance?
A life insurance policy pays your beneficiaries — you get to decide who they are — when you pass away. The life insurance company promises to pay a certain amount of cash (the death benefit) in exchange for premiums you pay.
Protect Your Family
The beneficiaries can use the money for anything they wish. The idea, particularly with term life insurance, is that the death benefit replaces the income you are no longer able to earn.
Having a sum of cash to cover living expenses, school tuition, and loan payments would protect your family from financial burdens as they figure out how to go on without you. Imagine the peace of mind a life insurance policy can give you and your family!
Protect Your Assets
Life insurance can protect your assets by providing funds to pay off your mortgage. Also, a business can purchase a policy, name itself as beneficiary, and collect the death benefit when you pass away. The proceeds can be used to pay off debts, buy out your shares of the business, or keep payroll going until the company finds its way forward or winds down.
Protect Yourself
Life insurance can provide funds for end-of-life costs, including a funeral. Proceeds can also be used to pay a car loan, credit card debt, or other outstanding debts. Some types of life insurance build cash value long term, which you may be able to access by borrowing from the policy.
FAQs
How long do you pay life insurance?
Life insurance premiums are generally paid for the entirety of the coverage term, for term insurance. Cash value life insurance coverage can be purchased with nearly any length of premium payments — from single-pay to flexible payments to policies that become paid up after a certain length of time.
How do I know if I need life insurance?
You should consider buying a policy if
- Your family depends on your income to pay household expenses.
- You have a mortgage or other debt that your family would inherit.
- Family members may owe estate taxes after your death.
- Your financial goals include retirement or leaving an inheritance.
What is the best age to get life insurance?
As soon as someone in your life — a spouse, parent, child, business partner, employee — depends on you for income or financial security, it’s time to buy life insurance.
However it is used, life insurance is important for your financial future and your financial plans. Contact Monarch Insurance partners to learn more. We love to answer questions and explain insurance!
Guarantees are based on the claims-paying ability of the issuing company.