Even though life insurance is often perceived as an older adult’s concern, it’s something you should think about even at a young age. Here are key reasons people of all ages need life insurance.
You have children or are preparing for one
Once you start a family, there’s no turning back in terms of ensuring your kids have the proper care. If you die or become ill and cannot work, your life insurance plan can pay your family bills. Life insurance covers mortgage, college, and other living expenses.
Pregnant women may get discounts on life insurance if they take a medical exam. The sooner you apply if you’re pregnant, the better rates you will get. The policy can help provide replacement income and pay for childcare.
You will be getting married
When you plan to get married, you should consider getting a joint life insurance policy, which reduces the impact of inheritance taxes. If either partner already has kids from a previous marriage, they should discuss any assets involved related to inheritance. One option is to establish trust for the children.
Setting up a life insurance plan for a married couple will ensure benefits to either spouse if one dies. Plans for newlyweds tend to be basic and affordable, but you can get even better deals if each spouse has their own separate term life plan.
You have dependent parents
Many seniors already have life insurance as a component of their retirement plan. It’s also becoming increasingly common for people to assist their retired parents. A recent AARP study found that over 6 million millennials are playing the role of caretaker for their parents or other relatives. A life insurance plan can help pay for caretaker costs and provide benefits if the policyholder dies.
Adding a long-term care rider to your plan can provide a lump sum of money to pay caretakers if you develop cognitive disorders. This money is deducted from the policy’s death benefit to cover costs such as living in a nursing home. A critical illness rider is similar, as the policy pays a lump sum to cover medical costs.
You have taken a student loan
Another important financial reason why you should consider getting life insurance is that it may help pay off student loans. If you co-signed a student loan with your parents and passed away unexpectedly, their policy may cover your debt. While federal student loans expire when the borrower dies, private loans become part of estate debt. The private lender determines whether the debt should be discharged when the borrower dies.
Due to the enormous liabilities involved, not many people except parents want to risk co-signing for a student loan. With life insurance, you can get a $100,000 term policy that covers student loan debt for less than $20 per month.
You are self-employed or have a family-owned business
When a family member owns a business, it’s helpful to get life insurance to cover the owner’s disability or death. The company can survive with a business-owned life insurance policy. Many times life insurance is compulsorily required by business loan lenders.
It’s essential to get life insurance for your business if your family depends on your income. In the event of your death, this coverage can pay for the business loan debt, severance to personnel if the business closes, and certain operational costs if the business continues functioning.
Your job involves high risks
If your career is dangerous and can lead to hospitalization, you need life insurance to pay bills while you’re away from work. Any type of work with or near heavy machinery or toxic chemicals poses risks to your health. High-risk occupations sometimes lead to disabilities, in which you are forced out of the workplace. While an employer might provide short-term disability coverage, a life insurance policy provides long-term disability coverage.
Insurance agencies have a good idea of the risks involved with any given occupation. They look at data on industry accidents and assess the history of the policyholder. People who pursue high-risk jobs should ask their employer to join a group life insurance plan. Employees who might benefit from a group plan include police officers, firefighters, construction workers, miners, and loggers.
You engage in high-risk adventure
There’s a price to pay for a life of high-risk adventure, as all types of insurers raise rates on thrill-seekers. People who like the great outdoors and participate in activities such as rock climbing have good reasons to buy life insurance. Hiking isn’t usually considered dangerous but can be in the wilderness. Other dangerous hobbies include skydiving, surfing, skiing, skateboarding, and snowboarding.
You’ll need to disclose to your insurer any of your dangerous hobbies that can potentially result in death. Otherwise, your insurer can reduce death benefits if they investigate and learn about these extreme activities. Be aware that you’ll pay less in life insurance if you become a professional rather than a private pilot.
There are many other reasons to get life insurance coverage to protect your loved ones. Contact our experts at Udell Family Insurance today! Each agent learns about their client’s needs and customizes an insurance plan to fit their goals. Call today and schedule an appointment so you can begin investing in your future.