Part of that strategy can include family protection plan life insurance, which, at its most basic, will help your loved ones stay financially afloat if you’re not there with them.
What does life insurance cover, and how does it do its job? Let’s break it down and look at the most common benefits of life insurance, as well as how you can get the maximum return on your money with your policy.
1. Pay off debt
One of the top reasons why life insurance is important is that you can use it to pay off debts that your family has incurred over the years. These can range from high-interest credit card bills to your mortgage or car loan. If you’re not in the picture, your family may struggle to pay off these debts.
However, a policy such as Ethos Life’s term insurance, with a benefit that can go as high as $2 million, could free your family from recurring debt and help them make a fresh start financially if you’re gone.
2. Educate your children
Another one of the most common reasons for life insurance is to prepare your spouse or partner to pay for your children’s education. According to the National Center for Education Statistics, the cost for a year of schooling at a four-year college or university averages $44,662. That’s more than many families can afford, but life insurance could make it work with less financial stress — allowing your children to get a good start in life in the professional world. Again, inexpensive term insurance is probably your best bet for this type of coverage, with a term designed to last until your children are grown and out on their own.
3. Pay for burial costs
The importance of life insurance in the days after your passing can’t be overstated. Your loved ones will be coping with grief as well as the many tasks associated with end-of-life and funeral costs. It’s likely they won’t be able to access your estate until the will is probated and made available to them. But a life insurance policy such as Ethos’ whole life insurance for seniors could cover those final costs, allowing your family to have peace of mind without having to worry about bills that will come due in the months after your death.
Whole life policies are available with benefits up to $30,000. With the cost of a funeral averaging a little over $9,000, a whole life policy from Ethos would be more than enough to handle the immediate costs and give your family some breathing room.
4. Leave a legacy gift
In addition to the family financial protection you receive from a life insurance policy, you may also use your policy’s benefit to aid those in need by making a gift to a charitable organization. Designating a charity or non-profit organization as the beneficiary of your policy is a satisfying, worthwhile way to ensure that your positive impact continues long after you’re gone. Your beneficiary may be your college alma mater, your favorite animal shelter, or an organization that provides emergency assistance to the homeless — whatever causes you’re passionate about can benefit from your generosity.
5. Make use of cash value
So, you’ve purchased a whole life policy to pay for the inevitable end-of-life costs that naturally occur. But there’s an additional benefit to whole life policies—the policy’s cash value. Simply put, when you pay into any form of permanent insurance, such as whole life, a portion of your premium goes into a savings vehicle, such as a mutual fund, which you can draw from during your life in the form of a withdrawal or policy loan.
If you pass away before you pay back the loan, it’ll be deducted from the death benefit. However, you may decide it’s worth having access to those funds. Perhaps you have medical bills or simply want to do some late-life travel. Regardless of your need, this is an additional reason why life insurance can be worthwhile for your financial future.
If the benefits of life insurance sound good to you, Ethos can help – we know you may have questions. Use our Coverage Calculator to help you determine the size of the policy that’s right for you, and apply for one of our no-medical-exam coverage options in about 15 minutes online by answering a few health questions.