What Financial Obligations Should Your Life Insurance Cover?
Life insurance can be used to cover many financial needs. No one likes to think about what would happen if you were to pass away. Should this happen, who would take financial care of those left behind? Often times, term life insurance is purchased to cover someone’s mortgage or other types of outstanding loans. It is typical for a person to take a term policy for the same length of time their mortgage is for. This way, if something were to happen to them, the mortgage could be paid off. There are policies that decrease in amount as the years go by to coincide with the mortgage as it decreases over the years.
Other types of life insurance policies provide coverage if you were to become terminally ill (if life expectancy is one year or less). This is called a rider and it could be added to the policy when it’s written. This gives the insured the option to be able to use some or all of the death benefit. There are no restrictions or limits on what you can use this benefit for. The insured would need to provide the insurance company with a statement by a physician that the insured has a medical condition that is expected to result in death within 12 months. (Note: there is a small one-time processing fee to do this.) The amount that your designated beneficiaries would receive upon the death of the insured would depend on the amount that was dispersed to the insured while living.
Remember a little planning goes a long way. There are other costs you may need covered if something were to happen to you. Thinking through all your debts and expenses is a vital part of being financially prepared. Being ready to face those challenges is an important way to protect your loved ones.You can get your free term life insurance quote now or you can contact me today to get started.
About the author: Pam Fortier has been in the life insurance business for over 30 years. She also holds both a LUTCF designation and a CISR designation. Pam is adept at helping clients select the coverage they want at the price they can afford. You can contact Pam at 1-800-651-1953 or PFortier@Pivot.com.