It’s a difficult topic, but essential to think about: If you died tomorrow, who would take care of your loved ones?
Life insurance can offer a vital financial cushion and long-term security for your family. But many people put off getting life insurance because of the process involved and many options available. And, let’s face it, it’s an emotional decision, too.
But actually, finding and signing up for the right policy is easier than you think. Here are four reasons it’s time to stop procrastinating and get life insurance.
- Your Family Might Depend on It
Mortgage and car payments, childcare costs, and other year-round expenses don’t vanish when someone dies. According to the National Association of Insurance and Financial Advisors, 1 in 3 households would struggle to make ends meet if the main wage earner died.
- Death Can Be Expensive
Unpaid medical bills, funeral expenses, and other costs add up. Your life insurance policy’s death benefit is available almost immediately after your death and it’s usually not subject to federal income taxes.
- It Buys Time and Options
Sometimes, the death of a loved one can force family members to make tough choices quickly. A life insurance policy allows survivors to pay off debts and maintain their current lifestyle without having to rush through financial decision-making. Both you and your family can breathe easier knowing that you’ve taken steps to safeguard their financial stability.
- It Protects Your Children’s Future
Unless you’ve built a large nest egg that your survivors will inherit, your death could also make it hard for your family to handle future expenses like college tuition. The death benefit from a life insurance policy can help provide your kids with better opportunities down the road, from getting a degree to buying their first home.
Coverage Options There are many types of insurance to support different budgets, family needs, and financial goals. Popular options include:
Term Life Insurance
Term life insurance is your most affordable choice. It lasts for a set term that you choose, such as 10 or 20 years. Should you die while it’s in effect, your beneficiaries can receive the death benefit as a lump sum, monthly payment, or annuity. It’s important to reevaluate your amount of coverage over time to make sure it still meets your needs.
Whole Life Insurance
While it can cost significantly more than term life insurance, whole life insurance has a cash value in addition to the death benefit it pays, making it a potentially valuable investment choice. A portion of your monthly premium goes toward this cash value, which grows over time on a tax-deferred basis. You can use this cash value as savings or loan collateral and even draw from it for retirement or to fund the policy itself.
This type of policy is in force for as long as you’re making payments, making it a smart long-term solution.
If you’ve been denied for coverage before, consider enrolling in a Guaranteed Acceptance Whole Life Insurance policy through Dover Federal's partnership with TruStage®. Applying is easy, and there’s no medical exam or lengthy questionnaire to fill out.
AD&D Insurance
Life insurance covers most causes of death, but you can supplement that coverage by adding other plans that apply to specific scenarios. Accidental Death & Dismemberment (AD&D) insurance pays a cash benefit should you die in a covered accident. It also covers serious injuries like loss of sight, hearing, or speech. This benefit offers a valuable lifeline to help defray the cost of medical bills or lost income due to injury.
Here at Dover Federal, our members can sign up for a no-cost $1,000 AD&D policy through TruStage as a special perk of their membership, with additional low-cost coverage available.
What to Consider
When choosing your life insurance, it’s important to consider:
- How much coverage you need: To estimate how much insurance you’ll need, take stock of your financial obligations and consider factors like your monthly bills, current debt, number of dependents, and future expenses like college. Weigh these expenses against your annual income and assets.
- Affordability: Coverage options range in cost from a few hundred to thousands of dollars annually. No matter which option you choose, remember that it’s better to have too much coverage than too little.
- Eligibility: Life insurance companies take a calculated financial risk to insure policyholders. Various factors like age, medical history, and lifestyle may affect your eligibility and rates.
A Wise Investment for You & Your Family
Turn to Dover Federal’s Investment and Retirement Center for personalized guidance to help you save, invest, and protect what’s most important to you, along with access to smart life insurance and AD&D coverage options through our partnership with TruStage.
