No one ever thinks the unimaginable will happen to their family. But every day in the news there are tragic stories of a young father or mother passing away, leaving young children behind. We have seen it in our own practice, and it is absolutely heart breaking.
In our practice, we constantly stress the importance of parents with young children to have term life insurance for the protection of their children and family. The goal of term life insurance is straight protection in the event something were to happen. It is the simplest and most affordable type of life insurance.
Here’s how term life insurance works:
You pay a level monthly premium for a guaranteed death benefit for a set period of time, typically somewhere between 10 to 30 years. In our practice, we recommend people hold term insurance until their children are finished with college and are self-sufficient. The hope is that you never need your term insurance policy, and at the end of the term you’ve simply paid for pure protection for your family. But if something were to happen to you during the term period, your beneficiary would receive the death benefit income tax free and your family would be ok financially.
If you’re one of the people that don’t think you need life insurance, consider the below scenarios:
- If your spouse passed away, would you be able to cover the expenses of your family on your salary alone? If not, would you need to downsize and return to work?
- If you are a stay at home parent and something happened to your working spouse, would you need to return to work to pay the bills? Who would care for the children, and how would you cover any costs?
- If you are a working parent and something happened to your stay at home spouse, who would care for your children, and how would you cover any costs?
A few other key points to note about term insurance:
- If you have term insurance with your employer, it is not transferable if you leave your job. If you change jobs, the policy is done. If you want insurance at your new employer, there may be a qualification period before you are eligible.
- Depending on the policy, you may be able to convert your term policy into permanent life insurance policy if you became terminally ill and would need coverage. We would recommend a financial plan to review whether or not this would be suitable for your own situation.
As independent insurance agents, we have access to all of the insurance carriers and can help you assess your family’s needs and provide you with a list of quotes. Call our office at 724-942-3340 to schedule a complimentary meeting to review your family’s life insurance needs.