This strange year has a lot of us doing some deep thinking about what would happen to our families if we should pass due to a disease that we seemingly have little control over. Consequently, life insurance policies have seen a bit of a renaissance.
Last fall, CNBC reported that young Americans are buying life insurance in large numbers as they contemplate what would happen in the event they catch this quickly spreading respiratory disease. Many insurance firms, according to this study, have noted double-digit increases in the number of life insurance policies they’ve sold during the Covid-19 pandemic, relative to last year. The increase is largely due to a fear of death and greater awareness of financial risks associated with mortality, experts said.
Search engine giant Google has noted that traffic for terminology such as “life insurance” jumped 50% between March and May this year compared with the same period in 2019. It’s no surprise that the pandemic has everyone worried about the future, especially those of us who have children and families that rely on financial contributions from both partners.
What is Life Insurance?
If the concept of life insurance was not on your radar before this pandemic, realize that you are not alone. There are many people who are just beginning the search for the type and amount of life insurance that is right for their circumstances. To begin understanding this concept, it is important to comprehend what life insurance is at its core.
Life insurance is an individual’s contract with an insurance company that ensures that a lump sum payment, known as a death benefit, will be paid to a beneficiary upon your death. In exchange, the insurer makes premium payments.
Life insurance comes in several different types including term, whole, and universal. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage.
Life Insurance Benefits
Many financial experts consider life insurance to be the cornerstone of sound financial planning. It can be an important tool in helping your family in several circumstances including:
- Paying Final Expenses such as funeral and burial costs as well as medical expenses that were not covered under health insurance.
- Replacing Income for Dependents of the Deceased. The most common example of this is when life insurance provides financial security when the deceased person was a main breadwinner.
- Future Savings. For young families planning on sending children to college or saving for a home, or other large item, a death benefit from a life insurance policy can help with future savings.
- An Inheritance for Heirs. Life insurance can many times be the only inheritance that a loved one has to pass on after they have died.
Are you pensive about life insurance this year and wondering what your premiums and benefits would be? Talk to our agents to find out more. Contact us today for more information. We are happy to help.