Life Insurance - Apprehensive About Insurance Coverage
Many people worry about being dead because they aren't able to do certain things. If you or a loved one is severely disabled and incurable, life insurance can provide the financial stability you need to stay in your home. However, many people are too apprehensive about coverage changes that can affect their policy's value to sign up for it.
This blog post will examine how life insurance plans work, its advantages and disadvantages, what changes have impacted policies in recent years, as well as tips to increase your chances of purchasing a policy that will provide adequate coverage.
Life Insurance
Life insurance is an agreement between the policyholder and insurance provider. The provider agrees to pay a specified amount of money that you designate to a beneficiary upon your death. This amount is called the death benefit.
Life Insurance Benefits and Protection
The biggest advantage of life insurance policies remains "insurance in case of death." Death can happen anytime, without warning, and this can leave a family member or loved one financially unstable. For example: You purchase life insurance for your spouse in case you die prematurely because of an accident or illness. Your spouse will have enough funds to maintain their income stream while they find or create another job that they enjoy.
Another example of when life insurance would be beneficial is if a parent dies. This could leave a child without the financial support that they need to pay any unexpected expenses, such as funeral costs.
You can also benefit from life insurance by keeping your loved ones or beneficiaries safe. You can leave money behind for your family members and even protect them in the event of your death so they don't have to take out loans to cover costs.
Life Insurance Value Changes
In most instances, life insurance is unprobated, meaning that changes in plan design will not affect the amount of coverage you have purchased. However, life insurance policies that have undergone certain changes may have their coverage reduced.
Life insurance that is reduced in value may be canceled and converted into a new policy, but you will have to pay much higher monthly premiums in order to maintain the same coverage. This cost can be very burdensome on some families due to the increase in payment it would require.
If you are apprehensive about your life insurance plan being modified or canceled, talk with your agent about the plan's details and how they affect its value so you can make an informed decision about how best to proceed. That way, you can better determine if keeping your current plan is worth the extra money that you will need to pay for it over time.
Life Insurance Advantages
A life insurance policy can provide you and your family with a sense of security because you have purchased a plan that can help provide financial stability in the event of your death. You can purchase several types of life insurance, each designed to meet an individual's unique needs. For example: term life is a good option for individuals who don't want to be burdened with monthly payments, while whole life offers long-term coverage for people who want to lock in their premiums for years. If you are interested in learning more about these different policies, consider asking an agent how they may affect your financial future and which one is right for you and your family.
Life Insurance Disadvantages
Some disadvantages include the cost of the premiums you will be required to pay, as well as the fact that you can no longer cancel or change a life insurance policy. Even if you decide that it is not worth the extra money you will have to pay, your plan will remain active, which can become very burdensome after several years. If the premium increases become too much for your family to handle, consider switching plans. You will have to pay a penalty fee if you cancel and switch policies before your current term expires, but this may be less costly than paying higher fees for another year or more without any changes taking place.
In addition, most life insurance providers do not allow you to pay off your plan early. If you want to stop your payments before your current term or policy expires, you will have to surrender it and take a tax penalty for doing so. The main exception is when the policy has been in place for more than ten years, at which point the tax penalty is waived.
Tips on Signing Up for a Plan
If you are worried about how changes may affect your coverage, consider purchasing a life insurance policy that offers guaranteed renewable features. These policies allow you to maintain your coverage without worrying about a modification or cancellation in the future. You will also be able to continue paying your premiums monthly without having to pay any extra fees for the length of the plan you purchase.
Hopefully, this blog post has provided you with more information about life insurance plans and how they can impact your family's finances in the event that something unfortunate were to happen. With a better understanding of how life insurance works, as well as its pros and cons, you can make an informed decision while shopping for a policy that best meets your needs.
If you are interested in talking with an agent about purchasing a new life insurance policy, call and schedule an appointment today. A representative will be more than happy to help you find the right coverage for you and your family.
Life Insurance Policy Limits: How Large Should Your Policy Be?
Everyone needs life insurance, but not everyone needs a large policy. The amount of coverage that you require depends on many factors including your current financial situation, the income that your spouse or partner would receive if he or she became widowed or incapacitated, and whether or not you have children who would need additional support to continue their education if something happened to their parents.
If you are an older adult, you may want to think about how much life insurance you will need to meet your family's needs in the event that something unfortunate were to happen. A child can continue their education in the event of a parent's death, as long as they have enough money saved up to pay for their tuition. On the other hand, a younger dependent might still need to go back to school in order to gain new skills that will help them land a better job later on. If they became widowed or crippled, they would still need continuing care and maybe even assistance with living expenses.
Know what your financial situation is today and make sure that the amount of coverage that you require is sufficient enough for your needs.
Conclusion
If you have children, have they decided whether they will continue their education in the event of your death? If not, your children may need continued support if they are widowed or crippled. However, if you are an older adult without children who has a spouse or partner to continue providing financial assistance for their needs, then you may want to think about purchasing a smaller policy.
If you have wanted to discuss the options that are available and their costs with an agent, please schedule an appointment today so that we can get started. Can't get to us in person? Call us at 866-229-5459.