What is life insurance? What is the use of it? There are 2 equally true answers to these questions: the legal, terminology answer and the real answer. In this post, we will go over both of them. Regardless of which one you prefer, life insurance is a necessity.
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What is life insurance? (Answer 1)
Life insurance is a legal contract between you, the insured and/or the owner, and the life insurance carrier. The life insurance company pays a death benefit to the beneficiary (ies) should the insured pass away during the policy period. The proceeds are tax-free to the beneficiary (unless your estate is larger than $5,49 million). The funds can be used to cover any financial losses that will occur because of the insured’s passing. Examples of financial losses are medical bills, mortgage balance, income replacement, car loans, credit card debt and etc.
There are different types of life insurance. The biggest classification is term and permanent insurance. Each one has its pros and cons.
We’ve created a list of dos and don’ts that you must consider prior to selecting coverage.
What is life insurance and why does it matter to you? (The real answer)
Let’s be honest. Nobody wants to think about life insurance. It is one of those things that it is easy to put off or to lie to yourself that you don’t need. We get it. But just take a minute and think about what is really life insurance?
Life insurance is a promise to your family that there will be financial help during the most difficult time in their life. It buys the most valuable thing in moments of sadness: time. People need time to grieve and to cope with the loss of a loved one. They will need time to process and make sense of it all. It is unrealistic to expect your spouse to go to work on Monday as if nothing happened. He or she will need time to process the new reality and pull him or herself back up. Children will also need time to comprehend the new reality.
Time heals. And life insurance can give your family that time. It is truly the most selfless gift you can give them.
Focus on what really matters
Life insurance policy will also give your loved ones a chance to focus on what really matters. It breaks our hearts when people have to set up a Go Fund Me account or do a car wash at the lowest point of their lives. They should be focusing on saying their goodbyes and honoring your life, not worry about how to pay for your funeral. And the truth to be told, funerals are expensive. The average price tag for a burial service is around $8-10,000. Many people don’t have that amount available.
Life insurance will help your family and loved ones to say their goodbyes, without having to worry about final expenses.
Provide choice and security for your family
Life insurance can also provide choices to your family. They can decide how to move on and what direction to take. It will give them that sense of security that things will be OK. And even though their world may be falling apart right now, you are helping them to put it back together.
Leave a legacy
Without a doubt, everyone wants to be remembered after he or she is gone. We all strive to leave a mark in people’s hearts and create memories. Through life insurance, we are able to ensure that our family dreams live even if we are not around. We can ensure that our children can afford higher education, that they can live in the family home. By preparing for the future, we teach them to be responsible. We show them how important it is to care for others and make sure they are protected even if you are not around.
Simply put, life insurance can help our dreams and goals to live on even after we are gone.
There is much more we can add as to what is life insurance. We can give countless reasons why having coverage is more than a piece of paper. However, the main reason to get life insurance is the one that drives you. When you call, this will be one of the first things that we will ask you: “What prompted you to want coverage today?” This will help us better understand YOUR reason, address YOUR concerns and respond to YOUR needs. So, what is life insurance for you?