New Year’s is arguably the perfect time to make resolutions aimed at improving your life in every aspect. One area you shouldn’t overlook is the financial well-being of your dependents in the event of your unexpected death. For instance, without your income, your surviving spouse may go into debt, striving to pay for college education for your children. That’s why purchasing life insurance should be among your New Year’s resolutions.
Why Life Insurance Is Necessary
Life insurance is a policy that provides financial assistance to your dependents in the event of your death. It pays for the funeral expenses and provides death benefits. There are no stipulations for how to use the proceeds. Therefore, your dependents can use the payouts to, say, pay off debts or cover their living expenses. Despite this, more than 100 million Americans are either uninsured or underinsured due to reasons such as the ‘presumed’ high costs of life insurance and myths surrounding this coverage. For instance, some people mistakenly believe life insurance is only necessary for those with dependents. Contrarily, you should get life insurance coverage if:
- You have an outstanding student loan or any other debt
- You have any debts borrowed against your estate
- You want your funeral expenses covered in the event of your demise
- You want to keep your family financially stable even after you pass away
It’s important to note that accelerated benefit riders can provide financial support when the policyholder is still alive. With such riders, the policyholder can use life insurance to pay for treatment expenses in case they are chronically or terminally ill.
What to Do If You Already Have Life Insurance
If you already have life insurance coverage, New Year’s is a good time to review it. Insurance experts recommend reviewing your insurance policies at least once per year in order to ensure you are neither underinsured nor overinsured. Policy review also enables you to take advantage of any new offers in the market that can possibly lower your insurance costs or enhance your coverage. For example, if the insurance company has introduced a new rider or service, you may be able to access it during reviewal. Reviewing life insurance coverage is necessary for policyholders who have experienced major life changes in the past year. Be sure to review your life insurance coverage if:
- You’ve improved your lifestyle and health
- You got married or divorced
- You took a mortgage loan
- You got a new baby in the family
- You started a business
Tips to Lower Your Life Insurance Costs
Although more than 50% of Americans overestimate the cost of life insurance coverage, this coverage can be expensive depending on factors such as age, size of coverage, and lifestyle habits. A smoker, for example, can pay up to 4 times of what a non-smoker would pay for life insurance. Ways to lower life insurance premiums include:
- Buying life insurance at a young age
- Choosing term life insurance policy over whole-life insurance coverage
- Living a healthy lifestyle
- Comparing rates from different insurance providers
- Paying life insurance premiums on time to avoid late payment fees
- Not adding life insurance riders if you don’t need them
How to Purchase Life Insurance Coverage
If you want to have peace of mind throughout the year, ensure you purchase the right life insurance policy this New Year’s. Our experts at Donald Weiss Insurance Services will help you find a life insurance policy that suits your needs. Contact us today to get started!