Life insurance is a contract.Life insurance is a contract between you and a life insurance company. The agreement is that for your premium payments, the insurance company will pay a lump sum, known as a "death benefit", to your beneficiaries at death. Life insurance's purpose is to provide a financial benefit to dependents upon the death of the insured person. The life insurance policy pays the specified "death benefit" to the beneficiary per the contract.
What kinds of things do I want life insurance for?
Do you have a dependent(s)? Do you want to leave a foundation for the ones I love? Do you share a mortgage? Do you have enough money in savings? Do you share outstanding debt? Can you cover your funeral costs? Do you want to leave an inheritance? Do you have prior experience in funeral planning?
The emotional impact of losing a loved one can cloud anyone's judgment. That is why life insurance is a necessity to protect your dependent loved ones. If you have a dependent(s)s and/or loved ones in your life, naturally they will hurt and need to grieve your death. Your death is the beginning of their life on earth without you. The main reason for life insurance is so that your loved ones can grieve their loss without financial burden.
The monthly premiums you pay creates the money your loved ones will need. To ease their financial burden during this transformational time of life for them. You can think of life insurance as a final love letter that comforts the ones you love at the time they need it most. If you want to give yourself that piece of mind, life insurance an answer to create the money needed.
Final Expenses: $350 for transportation of the body to the funeral home. $700 for embalming. $4,000 for a burial plot. $5,000 for a casket. $500 to lower the body into the ground. $1,200 for a headstone or marker. $1,150 for the ceremony. $250 for funeral transportation to cemetery plot site. $200 for ceremony programs. $30 for a guest book. $500 for the obituary notice. $400 for flowers. $300 for clergy. $200 for musicians. These costs may vary and this is over $14,500. Allow your loved one(s) to grieve without this financial burden. Life insurance will create the money need.
Income Protection: How much money a month will your dependents need to survive after you are gone? As a guideline, you can take the monthly income needed by your dependents, ex: $2500 and multiply that by 100. That is how to get an idea of how much life insurance to purchase on yourself to protect your loved ones if you die first. Example: $2500 x 100 = $250,000
Maintaining Survivor Standard of Living: If you die first, your life partner loses that half of them. Do you want your dependent loved one(s) to endure the inevitable financial burdens without you that life insurance will protect them from? They are alone in a world that was shared with you. Life insurance creates the money to make sure your survivor(s) can maintain a standard of living shared when you were alive.
Housing Expenses: After someone dies, their loved ones continue to pay the expenses of living. This includes mortgage or rent along with the utilities. Example: $2500 monthly. What will your dependents do after you are gone? Will they be able to pay to stay home? Your loved ones will need 8 to 12 months to grieve and figure out how they will live on. Life insurance creates the money to allow your loved ones to grieve without the financial burden of home payments. Example: $2500 x 10 months of home payments = $25,000
Paying Off Major Debts: Debts that are shared are debts that live on. Do you share a mortgage, credit cards, personal loans and/or car payments with a loved one? That debt still has to be paid for the account(s) to stay open. Life insurance creates the money so your loved one(s) can grieve without the financial burden of suffering credit loss, declining credit ratings, foreclosure and/or repossession.
Purchasing Life Insurance for Parent(s): If you are going to pay for your parent(s) final resting, you may want to create the final expense money needed with a life insurance policy. This way you can grieve your parent(s) passing without the financial burden of final expenses.
Life Insurance for Children: No parent wants to imagine burying their child. No matter how old your child is, they are always your child. It does not matter if your child is 5 months old or 50 years old. Life insurance creates the money to pay for final expenses and allows your child's loved ones to grieve with less financial burden.
Funding College Educations: Do you have dependent children and want to make sure to fund their college educations? Life insurance creates the money to fund your loved one(s) college experience. Easing the financial burden for their future.
Non-Profit Donation(s) Upon Death: When you die, you may want to leave a little money to an organization of choice. Children's Hospital, charities, libraries, whatever you may choose. Life insurance creates the money that you want to leave to what you were passionate about while you were alive.
Inheritance: Life insurance creates an immediate estate. Life insurance benefits are paid directly to the person, people or organization designated as the beneficiary(ies). You designate the beneficiary(ies). The insurance company will pay your beneficiary(ies) the death benefit income tax free. Life insurance is a valuable investment when it comes to wealth creation and transfer.
