What Is Life Insurance?

Life insurance is an insurance policy contract that pays money to the policyholder’s beneficiary or beneficiaries when the policyholder dies, as long as the policyholder has met their agreed-upon terms in the policy.

To get a life insurance policy, first the policyholder should choose which type of policy they’re interested in. We outline some of the many different forms of life insurance that are

available below.

Then, depending on the policy type, the life insurance applicant may be required to get a medical examination. For some plans, the younger you are and better health you’re in, the lower your life insurance costs can be. You could lock in a lower rate by signing up for life insurance earlier in life, which is why it’s a good idea to consider life insurance sooner rather than later.

For some life insurance plans, there’s no medical exam required. Whatever your age or health condition, there are affordable life insurance options available to you.

Reasons to Get a Life Insurance Policy

A life insurance policy provides benefits to the policyholder’s beneficiary(ies) so that the beneficiary can continue to live a similar lifestyle compared to when the policyholder was alive.

For example, take a family with young children that relies on the income of a sole breadwinner. If the breadwinner were to pass away, life insurance would pay the beneficiary (such as the spouse, in this case) death benefits that would help the family continue to pay their bills and live comfortably, even when that income stream is gone.

Life insurance policies can also benefit family members who aren’t the primary breadwinner. For example, in the above situation, if the stay-at-home spouse passes away, the surviving spouse may need to pay for childcare in order to keep working. Life insurance

coverage can help.

You may be wondering: do I need life insurance if I don’t plan to have kids or get married? Keep in mind that life situations can change at any time. Some people may become caretakers for family members, such as elderly parents, in the future. Even if you don’t think you need life insurance now, you can lock in the lowest rate possible today and assign relevant beneficiaries as your life progresses.

Life insurance can also help a beneficiary/family pay for end of life expenses, like a funeral, burial and outstanding debt payments, like student loans or credit card debt.

Life insurance provides financial protection and peace of mind. It alleviates stress that a family may have difficulty paying for outstanding expenses once someone has passed away.

Do I Need a Life Insurance
Policy Outside of Work?

Some employers offer group life insurance when you work for them. These plans provide a way to get life insurance coverage, but there are potential disadvantages when you have this as your only life insurance plan.

Typically, if you lose or quit your job, you’ll also lose your life insurance coverage through your employer. That means, you’ll have to go through the application process to get life insurance again.

Since your age and health can affect your life insurance costs, life insurance premiums maybe more expensive later than the cost you can lock in when you’re younger. Group life insurance through an employer can be a great supplemental benefit, but getting your own individual life insurance plan protects you in case your work situation changes in the future.

Another consideration with employer life insurance is that it may not provide you with the exact coverage you need. It may also be more expensive than an individual life insurance policy.

When you get life insurance through a life insurance broker like us, we’ll tailor your plan to fit your exact needs. That can help you save money and ensure you’re fully protected.