Why Should You Buy Life Insurance?

Life insurance can be a bit complex at times, but there are also many potential benefits. / Credit: Getty Images © Provided by CBS News Life insurance can be a bit complex at times, but there are also many potential benefits. / Credit: Getty Images

If your home gets damaged, homeowners insurance can help pay for repairs. If you get sick, health insurance can help pay for medical bills. But life insurance works a little differently in the sense that you're often buying a policy for the benefit of others.


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Some policy types, like term life insurance, provide a payout to beneficiaries if you pass away within a given period. Other policies, like whole life insurance, can give your heirs money whenever you inevitably pass away. 


That said, in some cases, life insurance can be used while you're still alive, such as if you're dealing with a chronic or critical illness, or if you want to access the cash value of a permanent life insurance policy. Life insurance can be a bit complex at times, but there are also many potential benefits.


Not everyone thinks life insurance is right for them, such as if they'd rather build their own savings to pass on to heirs. But many people do like the financial security that life insurance can offer. 


If you're in the market for life insurance then start by getting a free online price estimate now so you know exactly what to expect.


Why should you get life insurance?

Here are some of the top reasons many people buy life insurance:

To financially protect loved ones in your absence

If you pass away relatively young, your loved ones might not be financially prepared. For example, your children might depend on your income, and if you pass away before they become adults, then you might want to leave them with enough money to live comfortably.


In that case, a life insurance policy, especially a term one, could be used to pay out more than you might be able to save on your own. Many life insurance policies pay out as a lump sum, but there also could be options such as installments. That might help your family cover costs over time, similar to replacing your income.


To leave a nest egg in your absence

Related to financially protecting your loved ones in your absence, you might want to leave a nest egg for others, whether that's family members or a cause you care about, like a charitable organization.


For example, if you take out a life insurance policy that has a death benefit of $1 million, that could be a larger nest egg to leave behind then perhaps you would have been able to save for on your own within, say, a 20-year period.


Get a free online price quote for a life insurance policy from Haven Life here.


To pay down debt in your absence

Another reason why you might get life insurance is to pay down debt in your absence, such as if you don't want your spouse to be stuck paying off a mortgage on their own.


Keep in mind that your heirs might not be responsible for all of your debt — it depends on the specifics, like if they're cosigners. So, you may want to speak with a financial professional to better understand if and how life insurance could potentially help your family handle debt.


To use as a cash resource while alive

Some types of life insurance, like whole life insurance, can build a cash value alongside your death benefit. Depending on the specifics of the coverage, you might be able to access that cash value via borrowing, withdrawing some money, or using it to pay premiums, for instance.


However, sometimes withdrawing money requires surrendering your insurance policy, so it's important to know the policy details before acting. Regardless, building a cash value could be attractive to some people, such as those who struggle to save on their own and want to have this type of resource available after paying premiums.


You also might be able to access some of your death benefit while still alive, such as if you have a chronic or critical illness rider. While that could increase premiums, you might want that flexibility to help yourself and your family when dealing with an illness.


To cover end-of-life care

Another reason to consider life insurance is that it can cover end-of-life care, whether that's via a living benefit, like with a critical illness rider, or if it covers final expenses, like funeral costs.


Some forms of whole life insurance are marketed as burial insurance or final expense insurance. These generally have relatively small payouts but cost less than a traditional policy, and they can help your family pay for a burial or cremation, for example. While some people prefer a broader plan or want to save for final expenses on their own, others prefer the narrower scope of coverage.


If you're interested in a policy like this then start comparing providers here or use the table below to review some top insurance companies.


The bottom line

As you can see, there are many reasons to consider life insurance. Some people want to protect against specific scenarios, like passing away before your children become adults, while others like the potential financial benefits that life insurance can provide while still alive. Consider what matters to you and what your preferred financial strategies look like, and then see how life insurance might fit into your financial plan.



How Seniors Can Get Cheap Life Insurance

While it's true that life insurance is pricier for older adults, there are some reliable ways seniors can obtain cheap life insurance. / Credit: Getty Images © Provided by CBS News While it's true that life insurance is pricier for older adults, there are some reliable ways seniors can obtain cheap life insurance. / Credit: Getty Images

Most financial advisers would agree that life insurance is a fundamental part of sound financial planning. By providing a financial safety net for beneficiaries in the event of a death, a life insurance plan helps avoid any economic pitfalls. It can also help the policyholder while alive by providing access to a cash reserve (depending on the policy type).


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While there are significant advantages to having a life insurance policy, it's typically considered to be not worth it for seniors. For this population, life insurance is thought to be cost-prohibitive relative to the amount of coverage that can be secured. 


While it's true that life insurance is generally pricier for older adults (as are virtually all other insurance types), there are some reliable ways seniors can obtain cheap life insurance. In fact, the methods are similar for applicants in all age ranges.


If you're in the market for life insurance then start by getting a free online price quote so you know exactly what to expect.


How seniors can get cheaper life insurance

Here are three tried-and-true ways life insurance applicants, including seniors, can get cheaper life insurance.


Start as soon as possible

If you don't have life insurance - or want to supplement the coverage you already have - then it pays to act quickly. Life insurance is more expensive as you age and become riskier to insure. The older you are, the more likely you are to die and have your beneficiaries cash in a policy. That risk will be reflected in a higher charge to you.


Accordingly, it doesn't make sense to wait. A 65-year-old male will almost assuredly pay less than a 75-year-old male (with all other factors being equal). The longer you wait, the more you'll have to pay. You also run the chance of being disqualified altogether. You could also get a quote that is simply not valuable relative to the price the insurance provider wants to charge.


Don't hesitate. Get a free price estimate from Ladder today to see exactly how much life insurance you're eligible for.


Apply for a lower amount

The more coverage you want, the more you'll pay. This is a universal rule when it comes to life insurance, regardless of the age of the applicant. But since seniors are already at a disadvantage due to their advanced age, they can expect to pay significantly higher premiums for the same coverage a younger person is paying for a fraction of the cost.


So, don't apply for a $1 million life insurance policy. You probably won't be approved and, even if you are, it'll be very expensive. Instead, do a realistic appraisal of what you need and apply just for that (or less). Maybe you only need a policy to cover end-of-life expenses, for example. A policy for $20,000 then should be more than enough - and the corresponding price won't break the bank.


Improve your health

There's nothing a senior can do about their age. There are, however, plenty of things they can do to improve their health.


If you're a smoker, for example, then try to stop as soon as possible. If you're overweight, then improve your diet and start losing weight. Whatever you can do to reduce your liabilities, do it. This will help eliminate reasons for an insurer to charge you more. Seniors are already at a disadvantage when it comes to life insurance due to their advanced age. But if they can remove other factors from the equation they can both feel better and improve their chances of paying a more reasonable premium.


The bottom line

This is not an exhaustive list. There are other ways that seniors - and life insurance applicants of all ages - can secure cheaper life insurance. But if you want to get moving now, start working on your health, apply for a lower amount and don't delay.


Have more questions? The experts at Ethos Life can help you now.



Life Insurance – The Gift That Keeps On Giving

A whole life policy leaves a lasting legacy for children or grandchildren


WOBURN, Mass., December 13, 2022--(BUSINESS WIRE)--With the holidays approaching, people are frantically trying to find the perfect gifts for their children or grandchildren, whether it be a toy, a video game, or clothing. There is one gift, however, that they probably haven’t considered, but one that will leave a lasting legacy long after toys and clothes have been outgrown: life insurance.


While it may seem a little different than traditional gifts, whole life insurance can be an ideal holiday present, according to life insurer SBLI. Here’s why:


It can last a lifetime – and then some. Whole life insurance provides death benefit protection, creates a living legacy that will accumulate cash value year after year, and may help your child or grandchild get a head start on their financial future. And, if you choose a limited payment option, the policy can be fully paid with a single premium or within 10, 15 or 20 years.


Premium rates may never be lower. Premiums generally increase with age, but with permanent life insurance, it’s possible to lock in the premium at the insured person’s current age - for life. When a person insured is a minor, the life insurance policy is generally owned by the purchasing adult until the child reaches the age of majority as defined by state law. Upon reaching the age of majority, ownership of the policy can be transferred to the child.


It won't wear out or fall apart. As long as you pay the policy premiums, the life insurance policy you purchase for your kids or grandkids today can still be there years from now – something that material things can’t provide.


It has accumulation potential. Many gifts lose value over time. A permanent life insurance policy, on the other hand, has the potential to accumulate cash value each year. Cash values can be borrowed for any purpose — to provide a down payment on a first home, help pay for college, start a business or even to help fund a comfortable retirement years down the road.


Keep in mind: Loans against a policy will accrue interest and decrease the death benefit and cash value by the amount of the outstanding loan and interest, and withdrawals reduce the available death benefit.


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There are tax advantages. Cash values that accumulate in a life insurance policy are tax-deferred. Even when cash values are borrowed, there may be no tax consequences in many instances. Additionally, proceeds received by beneficiaries are generally not taxable as income. Talk with your tax advisor for more details.


A policy can help guarantee future insurability. Once the life insurance policy has been issued, coverage cannot be canceled as long as all required premiums are paid on time. Also, if a Guaranteed Purchase Option Rider is included with the policy, the person insured can purchase more coverage at specified ages or life events with no medical exams or health questions. This can be especially significant if the insured’s health situation changes. Just think: You could be laying their future family’s financial foundation as well!


It may not be the latest hot toy or electronic gadget, but life insurance truly is the gift that keeps on giving, providing benefits to your children or grandchildren well into the future.


About SBLI


For more than 115 years, SBLI (The Savings Bank Mutual Life Insurance Company of Massachusetts) has specialized in providing hassle-free, affordable life insurance. Whether it be term life, whole life or a plan that combines the two, we offer dependable protection, at a fair price. For more information, visit www.Sbli.Com.


SBLI is The Savings Bank Mutual Life Insurance Company of Massachusetts. Woburn, MA. Products and features may not be available in all states © 2022 All rights reserved.