If you find yourself pondering the question of whether you should buy a life insurance policy, you probably already know the answer. The question you should really be asking yourself is, "what should I do to make sure I find the right policy that meets my goals and my family's needs".
Making the decision to take out a life insurance policy to protect your family is the equivalent of purchasing a financial safety net. Essentially, you're making the decision to provide your loved ones with guaranteed protection from financial setback and/or catastrophe in the event of your death.
Let me ask you this question. If something unexpected were to happen and you didn't make it home tomorrow, would your spouse or children be able to survive or thrive financially without you in the picture. Chances are probably not.
What Can Life Insurance Do Besides Provide Income Replacement For My Family?
A tax-free death benefit (total amount disbursed to the benificiary/beneficiaries in the event of the insured's death) can be used for a multitude of different things. Besides disbursement to your lovd ones, the benefit can be used to help pay for estate taxes to reduce the government's reach on dipping into your pocket book as the money transitions to the people you've decided to gift.
But, the real question many people ask is, "What types of things will this tax-free death benefit do for my family".
Here are a few scenario's where having a life insurance policy in place can come in handy...
1. Paying off your mortgage - Just because you've died, doesn't mean that the mortgage lender or bank is going to stop coming for their payment when it comes due every month. Will your spouse or children be able to continue affording to make the payments? In this economy, the chances of that are unlikely. Putting a policy in place acts as a safety net that will either pay off the mortgage completely and provide long-term stability, or a form of equity protection in the short-term so that your family is able to continue making payments before eventually selling the home and transitioning to a life without you.
2. Affordable child care and other services - Without you or your spouse in the picture, many of the tasks performed in your daily life will add up and prove to be very difficult to take on as an individual. Eventually, you might be forced to hire for these services. That decision can be expensive. Besides child care you may need transportation assistance, as well as help with cooking, cleaning, and laundry asks - essentially, you may need a nannie or maid. Sure, you can try to be Super Parent. But, over time it's likely you'll be worn down by the rigorous demands of both work and your home life.
3. College tuition and other college expenses - Sure, many of us have made it to or through college on our own dime. However, many parents are involved with their children's educational advancement from a financial perspective. Can you imagine the stress that would be imposed on a child who all of the sudden was forced to be responsible for anywhere from tens-to-hundreds of thousands of dollars? Yes, there are student loans available. But, we all know that financial aid has a beginning and end. Often times their are gaps that need to be filled. Sure, the child can do it the old fashioned way and get a job, but how will that effect their learning, development, and education overall as they get closer to graduation and their academic schedule becomes more demanding.
4. Eliminate household debt - In today's economy, most families need to income earners in order to pay the bills and provide a lifestyle of comfortability. In all reality, many more families with only one parent/provider in the fold struggle and live in a reality often somewhere near the poverty line. Let's face it. America has been commercialized, and every day the people struggling are soon forgotten. The effects of the death of a loved not only can makes things difficult for surviving family members in the immediate, but can also have lasting effects on generations to come. Being crippled by debt is not a position your loved ones wanted to be left in after you've passed away. It's also not a lecagy that you'd want to leave behind.
Making The Decision To Purchase A Policy Makes Sense, But Where Should I Start?
There are many insurance policies out there, and an equal amount of them ready and willing to "sell" one to you. However, it's extremely important that you find a plan that will meet your goals, and provide for your family's needs after you've died.
In order to avoid wasting time and encounter lots of headaches dealing with different sales reps from different companies, maybe take a look at empowering a broker you can trust to do the shopping on your behalf. After a careful conversation to understand your goals and needs, the broker will have an idea of what you're trying to accomplish.
From there, that person will go to work finding you the proper plan for your unique situation. A good broker should be focused on finding you a plan that's affordable and fits comfortably in your budget so that it won't lapse - ultimately keeping your family's death benefit secure.
Also, they'll make sure they go out of their way explaining the ins and outs of your plan. Each plan is unique, and between living and death benefits needs to be one that you and your loved ones fully understand so that there isn't any confusion when the time comes for the plan to perform it's intended job. A good broker will be there to help communicate your intentions, and help navigate the specifics of your pending death claim.
Finally, many carriers all have different terms and qualifying guidelines pertaining to your age, health and more. A broker will take the time discuss any previous or existing medical conditions, or prescriptions you may be currently or have been formerly prescribed to. This will save a ton of time and dissapointment when finding the right provider to insure you with a tax-free death benefit that will be left for your family.
Contact Michael Scott (FFL) NPN #20142358 by email at michaelscott@familyfirstlifebenefits.com for any questions or assistance you may need. He is currently licensed in the State of Michigan and serves the residents of St. Clair, Sanilac, Macomb, Lapeer, and St. Joseph Counties.