How to Navigate the Winding Roads of Life Insurance Planning
As a parent, grandparent, friend and relative, you have many people in your life that you care about. You have spent so much of your life protecting and providing for these loved ones, so why stop now? There are many ways to ensure that you can hand down a legacy of which you are proud. Life insurance allows you to leave behind a lump sum to those that you select as beneficiaries. While it certainly cannot replace the love and memories that can last forever, it is a great way to ensure that your family has a financial cushion on which to fall.
What is Life Insurance?
To help ensure a comfortable future for their loved ones, many people fund a life insurance policy. For a set premium, an insurance company will provide a payment to the chosen beneficiaries when your life comes to an end. While many employers offer life insurance policies to their employees, the benefits often expire when you leave that role. For retirees, relying on company life insurance is not an option, but many still want to ensure that their loved ones will be taken care of when they pass. Whether you are retired or a former life insurance policy expired, you don’t have to leave your loved ones empty-handed and burdened with expenses.
Is it Too Late To Buy Life Insurance?
Many policies will ensure individuals over 70 years old and those who are relatively healthy will likely qualify for coverage. However, depending on your current health status, your options may be limited. As with most policies, it is best to begin paying your premiums while you are in good health. There are guaranteed life insurance policies that will offer coverage no matter your current health situation. As expected, this type of guaranteed plan does have additional premiums.
Life insurance is typically income tax free, but terms and conditions can vary depending on the specific plan that you choose. To ensure that you are getting the coverage that you need and your loved ones deserve, you should discuss your options with an insurance professional.
What Does Term Life Insurance Cover?
This type of policy offers coverage for a set period of time, or a “term.” If the insured were to pass away in this time frame, then the beneficiaries would receive the lump sum of the benefits. The term, or time frame, that is available to you will depend on your age and sometimes your health, as well. A 20-year coverage plan is often available to those that are 50 years old and a 10-year plan is more common for those approximately 70 years old. It is common practice to answer a few medical questions before being given a contract, and some insurance companies will require a medical exam.
What Does Whole Life Insurance Cover?
As the name indicates, whole life insurance policies offer coverage for the extent of your “whole” lifetime. These plans cost more than term coverage, but they also do not have an expiration date. Because term policies often have a cut-off age, whole life insurance can be a great option. Many people who are looking to use their life insurance policy as a way to maximize their retirement planning, cover business responsibilities, set up a trust or plan an estate, often look to a more permanent life insurance policy like whole life.
Are There Any Reasons to Forego Life Insurance?
While many retirees find life insurance to be surprisingly affordable, those living on a limited income may not have the funds for another premium. If you find yourself in a similar situation there may still be a solution that your loved ones can discuss amongst themselves. Many families come together and have the children or loved ones of the insured pay the premiums. Because children and loved ones are often the beneficiaries of a life insurance policy, some are eager to chip in for the payments.