How Does Life Insurance Protect My Family?
While you may not be able to provide for your family forever, the good news is you can plan to help financially protect them with the purchase of life insurance.
What are the benefits of life insurance and how exactly does life insurance protect your family? Let’s take a look.
Life Insurance Can Financially Protect the Ones You Love
When it comes down to it, the purchase of life insurance isn’t meant for yourself — it’s designed to take care of your loved ones when you’ve passed away. And if you’re responsible for the financial security of anyone, whether it be a spouse, partner, children, aging parents, disabled loved one, etc., life insurance is an advantageous way to help make sure they are financially taken care of upon your death.
Financial security. Life insurance can help provide peace of mind that your family will have some financial protection upon your passing. The death benefit can provide assistance with things like mortgage payments, care of disabled loved ones and basic needs like food and child care. Ultimately it could allow your loved ones to maintain their current standard of living without worrying about the lost income. Read more about how life insurance works to gain a better understanding of this important coverage.
Final expenses. The cost of final expenses, things like funeral costs, often amount to thousands of dollars — that’s a hefty out-of-pocket cost that you probably don’t want your family to be troubled with. Life insurance can help pay for things like the burial and funeral service, among other things. Learn more about life insurance for final expenses.
Medical bills. If you were to pass away from a health-related issue that racked up a substantial amount of medical bills, life insurance could help your loved ones pay them off.
Cash value. A permanent life insurance policy, like American Family’s Whole Life insurance or MyLife Flexible life insurance, has a component where you can build up cash value. This is a way that life insurance can help your family financially while you’re still living. Once you’ve built up cash value, you can borrow* against it to use it as a loan to go towards things like a downpayment on home, school tuition, investing in a business, etc. — the cash value is available to use as you please. However, if you don’t pay back the loan before you die, the outstanding loan balance plus any unpaid interest will be deducted from your death benefit. Want to learn more about cash value? Keep reading to better understand the benefits of cash value in life insurance.
Choosing a Beneficiary
In order to protect your family with life insurance, you’ll want to make sure you’re choosing the appropriate beneficiary. Typically, a beneficiary is the spouse or partner of the policy holder, but, especially in the case of the elderly, many choose their children as the beneficiary. Think about who will be responsible for your debts, state estate taxes, mortgage, nursing home, etc. when choosing a beneficiary. Learn more about choosing a life insurance beneficiary.
How Much Life Insurance Do You Need?
Now that you know how life insurance can assist your family by helping to provide financial protection, use our life insurance needs calculator to get an estimate of the coverage you need for your family. Learn more about how much life insurance you need to see exactly what you should consider when deciding the appropriate coverage amount for your situation.
Take a look at American Family Life Insurance coverages to learn more about our permanent and temporary coverages. Your agent is a great resource to answer any questions and help you customize coverage to fit your needs. It’s about protecting those who matter most.
*Disclaimer: Any loans taken from your life insurance policy will accrue interest. An outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim. If the loan balance grows too large for the cash value to support it, the policy could terminate.