Jun 12 2017

Single, Married or Building a Family? Why Having Life Insurance Can Help Smooth The Path To Financial Security – Part 2: Life Insurance For Parents

In the first part of our blog series on Life Insurance, we discussed the importance of securing a life insurance policy if you are married or in a long-term committed relationship. We also addressed some of the most commonly held misconceptions about life insurance, which our team at Bearingstar did our very best to start to dispel by offering specific examples of why life insurance is:

  • One of the most important things you can do to ensure your future financial stability
  • Extremely affordable especially when you consider the value and peace of mind that it provides
  • A smooth, easy, and comfortable buying process if you work with knowledgeable and proactive insurance professionals

At Bearingstar Insurance, we passionately believe that life insurance is extremely important to have – and worth the time investigating – no matter what chapter of your life you find yourself in today. That’s why we would like you to now consider how the right policy can safeguard the most important people in your life beyond your partner – your kids.

Even if you don’t yet have a family, or you’re not sure children are in your future, we hope you will keep reading this blog because you never know if/when this exciting adventure could be in your future.

PART 2: LIFE INSURANCE FOR PARENTS

If the sounds of little footsteps fill your home, or are about to, life has certainly taken a 180 on you, hasn’t it? There is no doubt that balancing work and family life is a challenge, and that having kids doesn’t leave much room for other things, including quality time with friends, pursuing your own personal interests, and, perhaps the most important, financial planning.

One of the components of planning a financially secure future, that can fall through the cracks for many parents, is buying a life insurance policy. Below, we have shared Bearingstar’s key reasons why we feel that, as parents, getting the proper life insurance policy in place should be one of your highest priorities:

  • You are now responsible for a lot of people’s financial future. Being a parent is a whole new ballgame because it’s not just about you anymore. You have transitioned into a role of great responsibility and we know that you are now doing your best to plan financially for several dependents, not just yourself. This objective can cause some parents a lot of stress, but it doesn’t have to. With your Bearingstar agent, you can review how much it takes to run your household, any outstanding debts and medical bills, your mortgage balance, and estimated taxes and funeral-related expenses, to determine the proper life insurance policy that will meet your family’s needs and safeguard their future goals when you are no longer there.
  • Your current life insurance may not carry sufficient coverage. Especially if your policy is through your place of employment, it would be wise to have an experienced insurance professional review the policy because most workplace plans have much lower levels of coverage than a recommended individual policy would. A low level of coverage could put things like your home and your family’s future at risk when you are gone. Plus, if you ever leave or lose your job, your life insurance will go with it.
  • You want to provide future income for your children. Even if you have no other assets to pass to your heirs, you can create an inheritance by buying the right life insurance policy and naming them as beneficiaries.

It’s also important to understand that it is not just the breadwinner in the family that should consider purchasing a life insurance policy. Millions of households in the U.S. “employ” non-working parents. We’re sure we don’t have to tell you that this person is a critical member of the household, providing invaluable service to every member of the family. In fact, Salary.com calculates that it would take an average of $113,000 to outsource all the activities that a non-working parent is responsible for, including caring for the little ones, paying bills, keeping the house in order, grocery shopping, and the list goes on. Paying these expenses out of pocket could be unaffordable for a surviving spouse, so Bearingstar thinks it is essential to ensure that your family is financially protected through optimal life insurance coverage for a non-working parent as well.

We have much more information that we would like to share with parents – both married and single – in order to help you better understand life insurance basics and beyond. More important, working with the local team at Bearingstar Insurance, you will find that the process of getting the right life insurance policy for your needs will be simple and cost-effective. Contact us today for more information or visit us at any one of our convenient Massachusetts or Connecticut offices.

Life Insurance Policy Types That Parents May Want To Consider.

We Hope This Brief Explanation Will Make The Insurance Process Simpler For You!

  • Term Life This policy offers coverage for a set amount of time with a fixed price for payments made monthly, semi-annually, or annually. This policy type may be a good option for parents who need a large face value for a limited period of time or if you are younger and budget-conscious. Premiums start low, but may increase at each renewal. Term Life coverage is usually renewable until at least age 70, but some policies are renewable up to age 95. At the end of the agreed upon term, you will usually have the opportunity to convert part or all of the policy to whole life insurance or to renew it for a shorter term, but at a higher price. There is also no cash value at the end of the agreed upon term. Finally, the death benefit is guaranteed and can be increased or decreased at any time.
  • Whole/Permanent LifeThis policy type has both an insurance and an investment component. The investment component of your premium builds an accumulated cash value that you, the insured, could borrow against or withdraw tax-free. You will pay the same premium from the day you make the purchase until the day the policy matures, or you are deceased. Parents may want to choose this policy type for many reasons. Perhaps you want to provide a continuing death benefit for your heirs while continuing to build cash value. Or, maybe you are not able to get any other type of policy due to health issues. Or, you could simply want to avoid spending the time it might take for health underwriting. Regardless of the reason you choose this policy type, your premiums remain level throughout the entire time you hold the policy and coverage is for life; most policies mature at either age 100 or 120. The death benefit is guaranteed but it varies relative to the cash value of returns on your investment. There is a guaranteed cash value that fluctuates with the underlying investment performance as well.
  • Joint LifeThis policy is designed to enable two people, typically spouses, to share in one life insurance plan. There are two types: first-to-die, which pays out to the surviving spouse after the first dies; and second-to-die, or survivorship, which pays a death benefit to the heirs after both spouses are gone. This policy may be right for parents looking for a way to lower the cost of life insurance or to make sure their estate is protected from taxes when they die. This policy can be purchased as either a term life or permanent life policy and your coverage, any cash value, and whether policy loans are allowed will be dependent on which policy option you choose. The death benefit is guaranteed.

One of these policy types could be the right life insurance option to meet your needs as a parent, but which one? The first step towards ensuring that you choose the optimal policy is to work with an insurance agent who will take time to understand your financial situation and explain all your life insurance options in easily understandable terms. For help finding the right life insurance policy for your unique life, please contact Bearingstar Insurance.

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