Life Insurance: A Key Tool for Financial Security

Life insurance comes in two main forms: term life and whole life insurance. Term life insurance is generally more affordable, but it doesn’t build any equity. It provides coverage for a specific period or “term” of years. Whole life insurance, also known as “permanent” or “universal” life insurance, guarantees a payout at some point. Although whole life policies come with higher premiums, they offer the benefit of growing in value over time.

Protecting Your Family with Life Insurance

Your financial plan should always include life insurance. If someone dies unexpectedly or due to illness, the survivors may experience considerable financial strain. Rather than leaving them in that situation, life insurance delivers a death benefit, giving your loved ones the funds they need. Even if you have an estate to leave behind, the probate process can take time. Life insurance provides quick payouts that are free from taxes.

Final Expense Life Insurance

This type of policy helps cover end-of-life expenses, which can become a large financial responsibility. Final expense insurance can pay for costs associated with funerals, memorials, burials, cremations, caskets, or urns. Additionally, some policies cover medical expenses incurred prior to death. The premiums vary depending on factors like the death benefit, the age of the insured, and their health status.

Fixed Annuities

Fixed annuities offer a steady income, delivering a fixed payout (often as a lump sum) that can provide financial stability regardless of market fluctuations. Depending on the annuity, when the owner passes away, any remaining funds may either go to the insurance company or be passed on to a designated beneficiary. Some fixed annuities are designed to offer both income to beneficiaries and a death benefit. To ensure your loved ones have the financial security they need after you’re gone, it’s important to have a fixed annuity with a death benefit. Some companies even allow you to increase the value of this benefit.

Mortgage Protection Insurance

A mortgage payment is typically the largest monthly financial responsibility for many families. Keeping up with mortgage payments is crucial. Mortgage protection insurance ensures that your home mortgage will be paid off if you pass away before the loan term is completed. You pay monthly premiums for this coverage, and if you die unexpectedly, a lump sum will be paid to your mortgage lender to settle the debt.