"September is Life Insurance Awareness Month, which made me think of our diets. Stay with me here. When it comes to our nutrition, we know that sweet treats tempt us with their deliciousness, but we also know that they can divert our attention from the nutrient-rich vegetables that contribute to our health and overall well-being. So too with a hyper-focus on investments, which can push aside core elements of our financial health, like life insurance."
"Why is life insurance so important? Because it is one of the few financial products that can solve a future problem easily. The core concept is simple: You agree to pay a certain amount of money to an insurance company (the premium), and in exchange, the company will pay out a lump sum or sometimes a stream of payments (a death benefit) to your designated beneficiaries in the event of your death."
"Unlike vegetables, not everyone actually needs life insurance. One quick way to determine if you do, is to ask yourself a basic question: If I were to die now, would anyone suffer financially? Beyond family, if you own a small business or if a large portion of your net worth is tied up in an illiquid asset (think real estate), you may need coverage."
Life insurance offers a straightforward way to address potential future financial shortfalls by exchanging regular premiums for a death benefit paid to designated beneficiaries. Coverage is necessary when a policyholder’s death would cause financial hardship for others, including family members, small-business partners, or when wealth is concentrated in illiquid assets. Life insurance can replace the economic value of caregiving, cover funeral costs, ongoing living expenses, debts like mortgages or car loans, and fund future needs such as college or a surviving spouse’s retirement. Premiums depend on age, health, policy type, and coverage amount. Use online calculators to estimate required coverage.
Read at www.mercurynews.com
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