The death of a loved one can have devastating consequences on the family members who are left behind. In addition to the emotional turmoil, there can also be significant financial ramifications. Without adequate life insurance, those mourning their loss may also have to deal with financial stress.
Fortunately, the insurance experts at Chichester Insurance Agency have the expertise and experience to help you and your loved ones manage the aftermath of these difficult situations.
What Is Life Insurance?
Life insurance provides critical financial assistance following the insured’s death. These policies come in many forms and can be customized to suit your specific needs. Once you have settled on a policy, your regular premium payments will maintain your coverage and enable you to access crucial funds if the person listed on the policy passes away during your insurance’s term.
Specifically, most life insurance policies can help loved ones and family members pay for the following costs:
· Burial expenses
· Estate taxes
· Remaining debts
· Medical treatment
· Administrative costs
In addition to helping family members pay for the aforementioned expenses, life insurance may also be able to provide vital funds for those who were dependent on the deceased by replacing lost income.
What Are the Primary Types of Life Insurance?
Life insurance policies can be modified and adapted to suit the policyholder’s and their loved ones’ specific needs or preferences. While there are many variations of life insurance, most policies can be classified into the following categories:
· Term life insurance—These policies provide coverage for a predetermined amount of time. If the death of the person listed in the policy occurs during that period, coverage may be paid out to beneficiaries. However, if the policy has lapsed, no funds will be provided. Term life insurance policies may be suitable for parents who want to ensure their children are cared for until adulthood. Similarly, this type of coverage may be helpful for those who want to ensure financial assistance is provided for spouses or families to pay off various loans, such as mortgages.
· Whole life insurance—This type of life insurance, also referred to as permanent life insurance, includes coverage throughout the insured person’s entire life. These policies may pay out to beneficiaries regardless of when their death may occur. Whole life insurance includes several subcategories, including the following:
o Universal life—These life insurance policies provide certain flexibility that may be desirable for policyholders. Universal life coverage may be capable of accruing cash value, which can then be used to help pay for your premiums.
o Variable life—This type of policy combines life insurance and a savings account. As your policy accrues value, you may be able to reinvest it in stocks or bonds. However, poor investments may harm the resources available to beneficiaries.
How Much Life Insurance Should I Have?
Like most types of insurance, life insurance needs can vary significantly and will be determined by your specific circumstances. If you want to make sure your loved ones are provided for following your death, consider the following factors:
· Your annual income
· How long you expect to need to work to care for your family
· Current debts (e.g., mortgages and auto loans)
· Future expenses (e.g., college tuition for children and dependents)
Analyzing the aforementioned aspects of your financial situation will help you gain a better understanding of how much life insurance coverage you need to support your family after you are gone.
Get the Right Coverage
In the aftermath of losing a loved one, the last thing you or your family should have to deal with is a complicated financial situation. Adequate life insurance is essential for ensuring those mourning a deceased loved one are taken care of and able to maintain their quality of life.
Our agents are here to help. Contact us today to discuss various life insurance options available to you. We will work with you to assess your coverage needs and craft an optimal policy that will help protect your family’s future.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.