If you have dependents who rely on your income, consider whether you need to purchase life insurance. Proceeds from your life insurance can be used for purposes such as:
- Providing replacement income for your beneficiaries and other dependents. This includes your spouse, children and other parties who depend on your for financial support.
- Paying off any mortgages.
- Paying your final expenses. This includes funeral costs and medical expenses
- Paying any taxes that your beneficiaries may owe on assets they inherit from you.
When purchasing life insurance, you have several options, including:
- Term life insurance, which covers a specific number of years. With term life insurance, your beneficiaries would receive a payment only if you die within the specific term. For instance, if you purchase a term life policy for twenty years, your beneficiaries would receive a death benefit only if you die within the 20-year period.
- A whole life or permanent policy that pays a benefit as long as the policy is in effect at the time of your death. This applies regardless of the age at which you die.
With a whole life permanent policy, options generally include ordinary life, universal or adjustable life, variable life and variable universal life. These provide options for adding a savings account, some of which include options to invest the savings in the stock market. In some cases, the amount accumulated in the savings account can be used towards reducing your premium amounts.
The type of insurance determines the premium payment amounts, with the premiums for term life insurance being much lower than the premium payments for whole life insurance. If you are considering purchasing life insurance, be sure to factor any insurance provide by your employer into your decision-making process.
The Complete Guide To Retirement Planning For 40-Somethings: Paying For College
Financial AdvisorCovering the needs of the ones you would leave behind is not easy. But efforts to secure a life insurance policy outside of work should pay off.
InsuranceUnless you have kids, it's easy to think you don't need life insurance Here are the reasons why you might– as well as which type and how much to get.
InsuranceDifferent stages of life call for different amounts of life insurance coverage. Find out what you need, when and why.
InsuranceTerm life insurance is an affordable way to financially protect your loved ones after your death. Here's what you need to know before purchasing a policy.
Managing WealthFind out how this factor determines your life insurance premiums and affects your payout.
RetirementWhether you need life insurance in your retirement depends on your existing insurance and your goals for passing on your wealth.
InsuranceCompared to other options, does it ever make sense to include cash-value life insurance in your investment portfolio? A look at the pros and cons.
InsuranceThere are many benefits to owning a life insurance policy - if you get the right one for you.