These can be tricky questions to answer because there aren't any "one-size-fits-all" explainers for them. To get your right answer, we should first define the basics of life insurance policies.
How Does Life Insurance Work?
A life insurance policy is a contract between you and an insurer where you pay premiums in exchange for their commitment to pay a "death benefit" to specific people or organizations if you die while the policy is active.
In most cases, your spouse or children will be the principal receivers of this death benefit. They can then use that money to cover their financial needs (e.g., repaying debts, household expenses, funeral costs, etc.).
Life insurance policies tend to fall under two categories:
- Term life insurance - This temporary coverage can last for 5, 10, 20, or another set number of years.
- Permanent life insurance - This policy covers the insured person until the end of their life.
Both of these types of insurance can come in different forms, with different levels of coverage and different benefits. In most cases, term policies tend to be the better choice for most people because it is more affordable and flexible.
Living Benefits Of Life Insurance In Denver, CO
As stated earlier, your beneficiary or beneficiaries will receive your death benefit in the event of your passing. But that's not the only advantage you gain from your life insurance policy. In fact, there are ways you can benefit from your coverage while you are still living!
Your policy can be customized to include a "Living Benefits" rider provision. Many Living Benefits options may allow you to access part of your death benefits while you're still alive. Those options may include things like:
- Accelerated death benefits - This option pays out a portion of your life policy if you ever face a terminal illness.
- Return of premium - This Living Benefit returns all the premiums you paid during the term so long as you don't pass away during the term.
- Policy surrender - Only applicable to permanent policies, this Living Benefit allows you to cancel your policy and access the cash value portion as a one-time lump sum.
- Long-term care benefits - This option lets you tap into the death benefit to cover long-term care expenses that your health insurance can't cover (only applicable to permanent policies).
These benefits can vary between permanent and term life insurance policies.
Why It's Important To Have Life Insurance
If something were to happen and you died unexpectedly, your death may have significant negative consequences for many important people in your life. Here are just a few of the most common ways your death may financially impact others:
- Debt inheritance - Unfortunately, most debts don't just vanish when you die. Other individuals like co-signers on your loan or joint account holders may end up inheriting your debts after your passing.
- Loss of income - Does your spouse or partner rely on your income? What about your children? If so, that loss of income could devastate your family's future.
- Business failure - If you own a business, your business partners and employees depend on you. Life insurance can provide financial assistance to those people in the event of your passing.
So, Do You Need A Life Insurance Policy?
The best way to answer this question is actually with another question! Ask yourself this: "Would your death financially impact your family members and the other people in your life?"
If no one in your life would be financially harmed by your death, then you can likely put off investing in life insurance for now.
If your answer is yes, then you should absolutely acquire a policy sooner rather than later!
Request A Quote For Life Insurance In Denver, CO
Are you looking for an affordable and customizable life insurance policy? If so, you've come to the right place. At Adler Insurance Group, we will craft a policy that is personalized to your unique needs at every stage of your life. We'll make sure that your coverage provides effective protection for your family's future without breaking the bank in the short-term.
Contact Adler Insurance Group today to request your free quote for life insurance in Denver, CO.