When you’re young, single, healthy, and stocked with endless stores of energy, the thought of having life insurance probably isn’t top of mind. Maybe it’s on your to-do list. Just not, you know, right now.
However, the years tend to move more quickly than we’d like. You get married and have children, your children get married and have children, your health might start to deteriorate, and suddenly there’s no priority greater than your family’s financial well-being.
In this article, we’ll explain why life insurance is important for your loved ones’ future and how a supplemental plan can provide even more financial security. When you’re ready, SELCO Insurance Services is available to help you find the most affordable options.
Important benefits of life insurance
You can think of life insurance as a safety net for your family. Even basic coverage offered by your employer can help your family cover medical bills and funeral costs in the event of your death. Taking it a step further, obtaining an additional plan outside of your employer can help replace your income to ensure your loved ones’ financial stability for years to come and prevent immediate hardship.
There are several types of policies to consider, including term life insurance, whole life insurance, and universal life insurance. Any of these options could prevent your loved ones from needing to dip into money from your estate or sell assets to cover end-of-life obligations.
Here are a few key benefits of life insurance:
- Financial protection for dependents. Even if you have savings and investments built up, they may not cover your family’s expenses if the unexpected happens. Death benefits from a life insurance policy are usually paid as a lump sum, which can help settle outstanding medical bills, loans, or funeral costs. This can significantly ease the immediate financial strain on your family during an emotionally challenging period.
- Income replacement. If your family relies on your income, a one-time death benefit payout can help cover ongoing budgeted expenses like food, utilities, health care premiums, continuing a family business, and tuition.
- Tax-free benefits for beneficiaries. Choosing to use life insurance to leave a legacy for loved ones or a charity is another popular approach. By doing so, your family or charity will receive the full benefits from your policy without a tax burden, ensuring they receive the maximum financial benefit.
- Add-ons tailored to your needs. For an additional cost, you can often attach riders to your life insurance to:
- Purchase extra coverage without a medical exam or underwriting.
- Waive premium payments if you become disabled.
- Access your policy’s payout for chronic illness expenses.
- Purchase additional coverage for your children.
Why your employer-sponsored plan may not be enough
Like many working Americans, you probably have a basic life insurance plan through your employer at little or no cost. While that’s a great starting point, as your life and career change it may no longer be sufficient coverage for your family. Here are a few reasons why:
- Your plan is connected to your job. Should you leave for another position, get laid off, or retire, your employer coverage will either terminate immediately or shortly after your exit. If you have supplemental insurance, you can take it with you.
- You may not be getting enough coverage. Buying an individual life insurance policy lets you determine how much coverage is right for your family. While opinions vary, the general rule of thumb is to have a plan or plans equal to 10 times your annual income. (Employer-sponsored plans are generally 1–2 times your salary.) You can request a life insurance quote at selco.org to get a rough idea what a comparable policy would cost.
- Your health could affect your access to individual life insurance. If you develop a medical condition while you’re employed or after you leave your job, it could be more difficult to obtain individual coverage. To alleviate that concern, consider securing a life insurance plan while you’re still young and healthy.
A SELCO Insurance Services agent can help you compare individual life insurance policies from multiple providers to find the best plan for your needs—often at a low monthly premium and without a medical exam.
“It is important that individuals speak with an insurance professional while navigating life insurance needs,” said Peter Bahen, SELCO’s Personal Lines Sales Manager. “Not only can we provide that advice, as an independent agency SELCO insurance Services can find the right fit for your needs from the best in local and national carriers.”
It’s never too early to start thinking about providing immediate financial relief and long-term financial security for those you care about the most. In fact, the earlier the better.
