Why You Should Purchase a Life Insurance Policy
By Will Montoya, Partner
Is Life Insurance Worth It?
Any type of insurance can be confusing, especially if you’re not sure if you “need” the insurance. Similar to purchasing property and casualty insurance for your home and vehicle, when you purchase a life insurance policy, you’re paying for the unexpected, but you’re also planning for tomorrow. You may have wondered, “Is life insurance worth purchasing?” It is, and as you grow older, you will realize its importance and feel more financially responsible for purchasing it.
Life insurance can be a real life-saver for everyone in your family, business partners, and other beneficiaries during a time of change. It’s an insurance product that everyone needs, but fewer people have life insurance policies than you think.
Here are several reasons why purchasing a life insurance policy is worth it and why you should buy it.
- Life insurance can help you protect your family from a financial threat. It replaces your income when you die, so your loved ones can stay supported financially and sustain their standard of living.
- It can help with funeral and burial costs, medical bills, and other expenses. You can easily rack up tens of thousands of dollars with these expenses.
- It can help take care of your children when they still live at your home.
- It can help take care of your children as they get older as well and need financial support for college or a wedding.
- It can be an inheritance. You can name your children as beneficiaries, and they can have a good financial future.
- It can help replace your spouse’s income. Otherwise, going from two salaries to one salary can drastically impact a family in a bad way.
- Life insurance provides income for day-to-day expenses.
- It helps pay off debts on such things like a mortgage, credit cards, and car loans.
- It can help pay estate taxes, which are high.
- It gives you peace of mind and protection in a time of uncertainty.
- Depending on the type of life insurance policy, it can build up cash value over time.
- It can keep you afloat if a business partner dies.
- It can be pretty affordable.
TYPES OF LIFE INSURANCE POLICIES
When you’re looking for life insurance, you can choose between two main types of policies: term and permanent life insurance policies. Each work in different ways to protect your beneficiaries.
- Whole Life insurance is also known as permanent insurance. You receive coverage for your entire life, as long as you pay the premiums. Whole life policies accumulate cash value on a tax-deferred basis. They can grow without taxation until the money is disbursed.
- Term Life policies provide coverage for a specific amount of time (5 years, 10 years or 20 years). Term life premiums are often less expensive than whole life premiums, but once the term of the policy is complete, coverage terminates. There is no accumulation of cash value.
- Universal Life is a permanent insurance policy. It offers you the flexibility that enables you to change your premiums and death benefit as your needs change.
- With Variable Universal Life*, those who are paying in can invest in different funds or other “vehicles.” A variable policy makes it possible to trade on the value of the policy in the open market. Variable life insurance products are long-term investments and may not be suitable for all investors.
- Survivorship life insurance is available as whole life, universal life or variable universal life, and covers two people and pays out when the second insured individual dies.
LOOKING FOR A LIFE INSURANCE PLAN?
Are you thinking about purchasing a life insurance policy? You should! Life insurance policies will give you confidence in your family’s financial future and help you build assets intelligently as you age. It’s a good idea to have a policy in place for financial preservation and confidence. Let our team at BKS-Partners help you get a life insurance plan that is right for you and your loved ones.
*Variable life insurance products, which are subject to market risk including possible loss of principal, allow the contract holder to choose an appropriate amount of life insurance protection that has an additional cost associated with it. Care should be taken to ensure these strategies and products are suitable for your long-term life insurance needs. You should weigh your objectives, time horizon and risk tolerance as well as any associated costs before investing. Also, be aware that market volatility can lead to the possibility of the need for additional premium in your policy. Variable life insurance has fees and charges associated with it that include costs of insurance that vary characteristics of the insured. The sub-accounts in variable insurance products fluctuate with market conditions and when surrendered the principal may be worth more or less than the original amount invested.
All guarantees are subject to the claims-paying ability of the issuing insurance company. Guarantees do not apply to the investment performance of any variable accounts, which are subject to market risk.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Kestra IS and Kestra AS are not affiliated with BKS-Partners.