Why Buy Life Insurance?

Why Buy Life Insurance?

Accidents happen.  Unfortunately, we hear about them every day.  Not just adults, but children too.  All you have to do is turn on the TV or check out the latest internet headlines and you’ll be overwhelmed with the amount of tragedies that happen daily.  From automobile accidents and heartless murders to natural disasters and unexpected illnesses, you never know what tomorrow may bring.

No matter what the circumstances are, I always ask myself the same question.  How is their family going to get through this?  Obviously there will be an emotional toll that will only take time to heal, but will there be a financial burden hanging over their head as well?

There doesn’t have to be.

Life insurance is a way to prepare for the unexpected.  Life insurance helps prepare your loved ones to deal with the consequences of your death.  It can also be a savings vehicle for the future with policies that have cash value. When others rely on you for income, buying life insurance is a wise decision.

Income Replacement

You may be worth more than you think to your dependents.  When you die, who will you leave behind?  If your answer was a spouse or children, then you need to consider how they will survive without your income. If you are the primary breadwinner in the household, then you need to determine your expenses and how long they will need income before they can change circumstances—get a smaller house, find a job or go back to school to get training for one.

Medical Bills and Funeral Expenses

Medical and funeral costs can add up.  For those who have suffered physically before dying, insurance payments may be a welcome relief to those you leave behind. Depending on the reason for your death and how long you have suffered, the cost of medical bills could be overwhelming. Add to that the price of a funeral.  Life insurance will ease the process of planning by making it possible without taking on debt.

Mortgage Protection

Mortgage protection insurance pays off your home in case of your death.  The loved ones you leave behind will need a place to live. One thing people buy insurance for is to pay off the mortgage on their house so their dependents will not have to move. In planning for the amount of life insurance you need, you should consider how much it would cost to pay off your house so that concern can be erased from the minds of your loved ones. There are even specific insurance policies that are structured to be mortgage protection in case of death.

Estate or Death Taxes

Did you know your loved ones may have to pay federal and state taxes on your belongings? In an article entitled “Why Should I Buy Life Insurance” the Insurance Information Institute points out that there can be federal and state estate taxes owed when you die.  If your family does not have the money to pay these taxes, they will have to sell belongings, incur debt or take a smaller inheritance.

Cash Savings

The Insurance Information Institute in the article “Why Should I Buy Life Insurance” also suggests life insurance that creates cash value, one reason being that interest is tax deferred and tax exempt if the money is paid as a death claim. If you do not die, the cash can be borrowed or withdrawn at the owner’s request. Some people buy these types of insurance plans for children when they’re young and use them for the purchase of a car or college expenses when they mature.

Regardless of your reasons, it is important to speak to a professional to find out what your options are and which options would be best for you and your family.  Buying life insurance is one of life’s BIG decisions and you shouldn’t make it lightly.

Supplements to Medicare

This is the year the baby boomers start turning 65.  What does that mean?  Medicare!!!! Four to six months prior to their 65th birthday they will receive an abundance of mail from Social Security and every insurance company out there.  It can be quite overwhelming, plus it is hard to determine what is officially from Social Security and what is an advertisement.  Medicare A (Part A), Medicare B (Part B), Advantage Plans (Part C) and Prescription drug plans (Part D).  What does this all mean and how does it work?

Part A is hospital coverage.  Once the deductible is met, Medicare will then pay for inpatient care in a Hospital.  Part A also covers inpatient care in a skilled nursing facility, Hospice services and home health care services.

Part B is Medical expenses.  There is a deductible then Medicare covers 80% of the Medicare approved amount for Medicare approved services.  Medicare will pay for most medically-necessary services.

Part C is Medicare Advantage Plan.  An insurance company manages the Medicare benefits and it replaces original Medicare. There may be a low monthly premium for this plan and some are free.  You will have co-pays when having any medical treatment and a network of Doctors that accept the plan.

Part D is prescription drug coverage.  Everyone is encouraged to sign up for a Prescription drug plan when turning 65.  If this option is not chosen then when coverage is needed there will be a penalty added to the current premium for each month the coverage was not in effect from the month you turned 65.

What are your options?

Medicare Supplements or Medigap policies will fill or partially fill the gaps in Medicare (deductibles and/or co-insurance).  There are several plans to choose from with a range of monthly premiums.  With a Medicare Supplement you can choose any doctor or hospital.

Medicare Prescription drug plan is purchased to cover medications for a co-pay or co-insurance.  There are many different plan options to choose from.

Medicare Advantage Plan - lower premium but will have co-pays for medical services and are encouraged to stay within the insurance companies network of physicians and hospitals.  Many Advantage plans have the prescription drug coverage included in the plan.

For a one on one consultation to determine which plan fits your needs and budget contact me - Krissie Berni at 772-713-7265.