Do you even need life insurance?
Let’s be honest, no one wants to talk about life insurance. It’s morbid and not fun to talk about dying, but like taxes, death is an eventual certainty. And whether we prepare for them or not, they will eventually come.
Think about it; if something happens tomorrow such as a car accident, heart attack, or terminal diagnosis and you do not make it out of the hospital, you will unfortunately leave behind debts, bills, or final expenses.
Home insurance, car insurance, and health insurance are usually things most people set up, but if you have a family and dependents, one of the most important insurances to have is life insurance. Life insurance is a crucial step in planning for your future and the future of your loved ones. In the event of death, life insurance benefits are paid to your surviving spouse and family so they can live comfortably. It helps cover everyday expenses like mortgage payments and household bills or supplements your retirement funds.
The good news is…
Some life insurance policies not only provide cash received from a policy (the death benefit) when you pass away, but can also provide living benefits if you are diagnosed with some critical illness. Most carriers allow you to advance or collect up to 90% of your death benefit (face amount) if you have a heart attack, cancer, end-stage renal failure, or a major organ transplant. You have the freedom to use this living benefit or cash to pay for your medical bills, everyday bills, debts, and even future expenses while you are recuperating. For more details, read more here: Life Insurance Policy with Living Benefits.
Protecting yourself with life insurance can give you and your beneficiaries a certain comfort and satisfaction of solid, secure, and even permanent financial stability.
If you have a machine that spits out $5,000 a month, you would insure it in case something tragic like an accident happens or it falls apart. That machine is you to your family. Once you are gone, your income is gone forever, but your family’s daily expenses will continue for a lifetime.
Is Life Insurance Expensive?
Several factors are used to calculate rates for life insurance. Some insurers may give you an estimated quote based on your age (it is cheaper when younger), gender, the policy type, and amount of coverage you are seeking, but most of them will be unable to give you the final rate unless you answer all the probing questions regarding your health history and submit to a physical exam. This is the reason why it is best to talk to a trusted life insurance consultant who can help you shop for affordable life insurance and assist you dig through all the life insurance aspects.
How Much Life Insurance Should You Ask For?
A great start is to sort through the expenses you may leave behind when you pass away. If you do not have family or dependents to care for, an insurance plan that covers funeral expenses, taxes, medical bills, or any other final expenses may be all you need. The most commonly used formula to calculate what you need in a life insurance policy is approximately 7-10 times your annual salary or the amount of your current debt and expenses.
Types of Life Insurance in Oregon:
This is a good choice for your family in the earlier years when life insurance needs are the greatest. It is also very affordable for a high-level of coverage or face amount, and may make sense if you have a young family and/or your budget is tight. It provides protection for a specific period of time, and mainly pays a benefit only if you die during the term. This type of insurance makes sense when you have a need for coverage that may disappear at a specific point in time like college education for your kids or your mortgage.
This is permanent coverage for the rest of your life. It is a combination of life coverage with an investment fund, paying a stated, fixed amount on your death. Part of your premium goes toward building cash value from investments of the insurance company which are tax-deferred each year you keep the plan, and you can borrow against the cash accumulation fund without being taxed. The amount you pay usually does not change throughout the life of the policy.
This policy is a type of permanent insurance policy. It combines term insurance with a money market type investment that pays a market rate of return. To get a higher return, these plans usually do not ensure a certain rate.
These are permanent policies with an investment fund tied to a stock or bond mutual fund investment. A such, returns are not guaranteed.
This is permanent life insurance offering death benefit protection when loss of life occurs. Like other forms of permanent life insurance, your premium payments may earn interest and grow cash values of your plan. What differentiates IUL from other permanent life insurance is the way interest is credited to the policy. In addition to the company offering its own declared interest rate, IUL also offers an interest option linked to the movement of a selected stock market index over a specific period of time. The manner in which interest is credited to your IUL policy gives you the potential for strong cash value accumulation. A key benefit is that it offers protection in a poorly performing market. With IUL, the credited interest rate is guaranteed to never be less than zero percent.
This is a good choice if you want to have access to cash in times of difficulties while you are still living. If you face qualifying chronic, critical, or terminal illness, you can use it to pay for care or treatment not covered by your health insurance plan, household expenses, or anything helping you through a difficult time.
Term Life Insurance vs Permanent Life Insurance
Term life insurance allows you to buy a high amount of coverage at a very low and affordable price. If you need a large insurance policy for your family, such as college education funds, Term life insurance is your better option. The main goal here is to have a huge coverage during the years you need it most with rates you can afford. However, the disadvantage of term insurance plans is they expire with no cash value.
When you choose permanent life insurance, you are purchasing a policy that is also an investment because it accumulates cash value over time. In addition, the money you put in can be withdrawn or borrowed against at any time if the need arises. And it does not expire. The only disadvantage of permanent life insurance their high rates, often not affordable for many.
Do Retirees Need Life Insurance?
Life insurance for everyone is a good idea, even for retirees. Because life insurance policies are meant to pay off debt, leave a legacy, or provide for partners and families in the event pension do not include survivor benefits. As a retiree, if you owe debt, care for someone, or a member of the family depends on you financially, you need life insurance.
What if There are No Dependents?
Is a life insurance policy necessary for those without anyone left behind? The answer is YES. Life insurance with living benefits, also called the “life insurance for the living” is perfect for these situations. The “living benefits cash” will support your needs in paying for recovery and other expenses in the event illness or injury where you are unable to earn income or if you become incapable of performing dailiy living activities. Some of these life policies allow you to cash out portions of your face amount.
Talk to Your Trusted Life Insurance Consultant
Health Plans In Oregon is a licensed insurance agent providing help to thousands of Oregonians since 2006. We offer free help with different policies and life insurance quotes. Let us help you achieve the financially secure life you have always wanted.