Life insurance is an important financial tool that provides both peace of mind and financial security for families. Simply put, its basic and most important purpose is to pay out a lump sum of money to the beneficiary or beneficiaries of the policyholder in the event of their death.
By purchasing life insurance, you can help provide financial protection, security, and stability for your family following your death, whether that death is the result of unexpected tragedy, prolonged illness, or simply old age.
Why life insurance should be part of your family’s financial plan
Because of the significant financial benefit it offers, life insurance should be a key component of every family’s financial plan. Here are 5 reasons why you should make life insurance a part of your family’s financial plan:
1. Providing for your loved ones: One of the most important reasons to have life insurance is to ensure that loved ones are provided for financially in the event of your death. The lump sum payout from a life insurance policy can help cover expenses such as funeral costs, outstanding debts, and daily living expenses for your spouse and children.
2. Protecting your family’s assets: For families who have accumulated assets such as a home, a business, or investments, life insurance can help protect those assets. If the policyholder were to pass away, the payout from the life insurance policy can help cover the costs associated with maintaining those assets, prevent your family from having to sell them, or even pay off outstanding debts related to them.
3. Paying for children’s education: For families with children or grandchildren who plan on attending college, life insurance can help cover the costs of tuition and other expenses associated with education. This can be especially important if the policyholder is the primary breadwinner in the family.
4. Supplementing retirement income: Life insurance policies can be used to supplement retirement income whether in the form of the cash value of the policy, the death benefit, or both. As such, these policies can be designed to provide a steady stream of income in retirement and protect against the loss of a social security check, a pension, or other income when you or your spouse pass away.
5. Estate planning: Life insurance can also play an important role in estate planning. The payout from a life insurance policy can help cover estate taxes, provide liquidity to beneficiaries who may need to access funds quickly, or simply provide a pre-planned inheritance for loved ones.
Choose the right type of policy and the right amount of coverage
When considering life insurance as part of a family’s financial plan, it’s important to choose the right type of policy. There are two main types of life insurance: term life insurance and permanent life insurance. Term life insurance provides coverage for a specific period of time, typically 10, 20, or 30 years. Permanent life insurance, on the other hand, provides coverage for the policyholder’s entire life and often includes a savings component.
The amount of life insurance coverage needed will depend on your individual family’s financial situation and needs. At CEG Life Insurance Services, we have experienced and independent life insurance advisors who can help you determine the appropriate amount of coverage and type of policy for your family’s specific needs.
Make life insurance part of your family’s financial plan
In summary, life insurance can play an important role in your family’s financial plan. It can provide financial protection and stability in the event of unexpected tragedy, help cover expenses associated with maintaining assets, pay for education, supplement retirement income, and play a role in your estate planning.
Contact us at CEG Life Insurance Services today to take the first step to adding life insurance to your family’s financial plan.