Nobody wants to sit around and think about their own death. However, death is an inevitability of life. If you were not around today, how would your family be taken care of? Unfortunately, many people do not buy life insurance because they believe they don’t qualify or it’s not affordable. With this in mind, here are a few life insurance facts that may help dispel any reservations you might have.
Life Insurance is More Affordable than You Think
Many people overestimate the cost of life insurance. That’s not to say that life insurance is always exceedingly cheap, and some policies do cost more than others. For the most part, however, term life policies are the most affordable.
There is a price to pay for not having life insurance. First is a funeral, which averages $7,000 to $10,000. And if you plan on paying for your children’s college, the loss of your income might even keep them from attaining their higher education goals, or ultimately impact a surviving spouse’s financial comfort in retirement.
This expense can leave your family struggling to keep up with the mortgage. If you’re concerned about your family’s ability to keep up with amortized payments. A term life insurance policy can be used to cover mortgage costs for your family should something happen to you.
When shopping for life insurance, you may face a choice between whole life and term life policies. There are tradeoffs for each choice, but most financial advisors recommend term life insurance policies. This more cost-effective option can protect your young family in the event of your death, but it expires after a term of years, ideally once your children are grown and out of the house.
Medical Exams aren’t Always Required
If you have a medical condition, you might believe that you won’t qualify for insurance at all. Thankfully, as Haven Life explains, there are a few different life insurance products you can buy with no medical exam. One of these is simplified life insurance, which does ask for a medical questionnaire so the underwriter has basic information upon which to make a decision. This type of insurance policy is ideal if you don’t want an exam.
Another option is a medically underwritten policy, which is a good choice when you need more than $500,000. These often do require a medical exam, but, based on your health history and a lifestyle questionnaire, some applicants can skip this part of the process. When your needs are less than $50,000, a guaranteed issue life insurance policy is an affordable choice. For this no-exam policy, you’ll probably pay more, and your beneficiaries may have to wait a few years before receiving a full death benefit.
Single People Need Life Insurance, Too
Another common excuse for not buying life insurance is being single with no children. Unfortunately, somebody is still responsible for your expenses. If you die without a will, your closest kin will have to go through probate, and that can keep them from inheriting your money to pay for your funeral for several months.
A life insurance policy, however, has to have a beneficiary. This means it does not have to go through probate, and your family won’t have to come out of pocket for interment costs. Furthermore, if you choose the right policy, you can use accelerated benefits to help pay for medical expenses if you wind up with a terminal illness or life-changing injury.
Get the Policy You Need
The takeaway here is that most people need life insurance. Learning how to distinguish myths from reality can help you make a better decision about your finances. You might not be around to use the funds, but your loved ones will thank you.
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What Happens If You Die Without a Will
If your loved one dies without a will, it can be overwhelming to figure out what to do next. Usually, when a person dies without a will, it is called dying intestate.