What is Life Insurance and Why Do I Need It?
Life insurance is one of the most important types of insurance that Hubler Financial Services provides. Life insurance is a contract between an insurer and a policyholder that guarantees payment of a death benefit to named beneficiaries upon the death of the insured. The purpose of life insurance is to provide financial protection to the insured’s loved ones in the event of the insured’s untimely death. The death benefit can be used to cover funeral expenses, pay off debts, provide ongoing income to dependents, or any other financial needs that arise after the insured’s death.
There are many reasons why someone should have life insurance. Here are some of the most important:
- Provides financial protection for your loved ones: The most important reason to have life insurance is to provide financial protection for your loved ones. If you were to die unexpectedly, your family would be left to deal with the financial consequences of your death. Life insurance can help ensure that your family is taken care of financially, even if you’re no longer there to provide for them.
- Pays for final expenses: When you die, there are a lot of expenses that need to be paid, including funeral costs, medical bills, and legal fees. Life insurance can help cover these expenses so that your loved ones don’t have to pay out of pocket.
- Provides ongoing income for dependents: If you have dependents who rely on your income to support them, life insurance can provide ongoing income to help them maintain their standard of living after you’re gone. This can be especially important if you’re the primary breadwinner in your family.
- Pays off debts: If you have debt, such as a mortgage or car loan, life insurance can be used to pay off those debts so that your loved ones aren’t burdened with them after you’re gone.
- Provides peace of mind: Knowing that your loved ones will be taken care of financially in the event of your death can provide peace of mind. You’ll know that they won’t have to worry about money during an already difficult time.
There are two main types of life insurance: term life insurance and permanent life insurance.
Term life insurance provides coverage for a specific period of time, typically 10, 20, or 30 years. If the insured dies during the term of the policy, the death benefit is paid out to the beneficiaries. If the insured survives the term of the policy, the coverage expires and no benefits are paid out. Term life insurance is typically the most affordable type of life insurance, making it a popular choice for those who need coverage but don’t want to pay a lot for it.
Permanent life insurance, on the other hand, provides coverage for the insured’s entire life, as long as the premiums are paid. There are several types of permanent life insurance, including whole life, universal life, and variable life. Permanent life insurance is more expensive than term life insurance, but it offers more benefits, such as the ability to build cash value over time.
When deciding whether to buy life insurance, there are several factors to consider, including your age, health, and financial situation. Younger people typically pay lower premiums for life insurance than older people, because they’re less likely to die during the term of the policy. If you’re in good health, you may also be able to get lower premiums, because you’re considered to be a lower risk. If you have a lot of debt or dependents who rely on your income, you may want to consider getting a larger death benefit.
In general, it’s a good idea to buy life insurance as soon as possible, because the older you get, the more expensive it becomes. If you wait too long, you may not be able to afford the coverage you need.
In conclusion, life insurance is an important tool for providing financial protection to your loved ones in the event of your untimely death. Hubler Financial Services will create a customized life insurance plan to suit your family’s unique needs.