September is National Insurance Awareness Month which prompts the question of whether you are adequately covered. Right now is a great time to assess your insurance coverage and evaluate your risk of being underinsured.
The importance of having life insurance coverage
The idea of having life insurance coverage can feel daunting. Still, the meaning of it is simple: life insurance protects your family from financial hardship if you were to pass away unexpectedly. Life insurance will help your family provide for lost income, help cover bills, and debts left behind, cover funeral expenses, and help pay for other financial obligations. If you have a spouse or dependents, life insurance is one way to protect the people you love.
Ways to evaluate your coverage needs
- If you have someone that depends on you to support them financially
- Whether you have dependents
- If you have debt
- You lack financial resources to cover expenses related to death—your funeral, estate expenses, attorney fees, etc.
If you answered yes to any of the above scenarios, life insurance might be an option for you to consider. Purchasing a life insurance policy for the correct death benefit amount to cover all of your financial obligations is essential. Here are two options for you to consider:
Universal Life Insurance
Universal life insurance provides a guaranteed death benefit while accumulating cash value. It can and provide flexibility in premium payments, but most people choose monthly or quarterly payments. Often, Universal life insurance is called whole life or permanent insurance. This type of insurance has two parts; the savings or investment portion and the insurance portion. Universal life is used for death coverage and provides for retirement assets if used as part of retirement planning.
Indexed Universal Life (IUL) Another type of life insurance for you to consider is an IUL insurance policy. IUL insurance provides a death benefit with a separate cash value account that increases in value over time. The performance of the IUL policy mimics an equity index, such as the S&P 500. The IUL insurance policy increases when the market performs and does not lose value when underperforming. For this reason, an IUL policy has the possibility of a higher cash value accumulation than a universal life (UL) insurance policy.
Contact me to get started.
As your financial professional, I can help you understand which type of life insurance is appropriate to your situation and get you started reviewing your current coverage or applying for new coverage. Once you determine whether life insurance is necessary and which type of life insurance coverage is appropriate,
it’s essential to make sure you have enough coverage.
This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contact your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
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