If you financially support anyone in your life, you probably want to make sure they’d be fine even if you were no longer around. That’s where life insurance comes in.
What is life insurance, exactly? It’s an agreement between you, the policyholder, and an insurance company. According to that agreement, if you pass away while the policy is in force, the insurer will provide a certain amount of money to people you’ve chosen (this is your life insurance beneficiary).
Your loved ones can use this money however they want. For example, this “death benefit” can contribute to daily living expenses like rent or mortgage, pay off debt such as student loans or a car loan, cover final expenses for the person who passed away, fund a child’s college education and more.
There’s never been a better day than today to get life insurance checked off your list. Here are five great reasons why.
As long as there are people depending on you, it’s important to make a plan for them financially in case something were to happen to you. If you weren't around anymore, how would your spouse support the family? Who would pay for your children's college education?
One of the most common reasons people get life insurance is because they have started a family and want to make sure their children will be provided for in the future. There are a lot of considerations when it comes to life insurance for parents, such as the age of your kids and how many years it’ll be until they’re financially independent. Parents will also want to consider whether term or whole life insurance is the best choice for them—term life insurance tends to be much cheaper, and in many cases it’s the best choice for parents because it provides the most coverage for the least cost.
Dependents aren’t necessarily children, though. For example, if one spouse makes significantly more money than the other, or if they don’t work, it may make sense to get a life insurance policy to make sure they can maintain their standard of living in the other person’s absence. For example, if that person couldn’t keep up with the mortgage payments by themselves, would you want them to be forced to sell the house?
Similarly, if you take care of an aging parent, you may want a policy to make sure they’d get the care they need without you. In this case, you might think about the right term length that would cover them for the rest of their life. For example, if your aging relative is 80 or 90 years old, you might feel confident with a 10-year term life insurance policy. If you are taking care of someone who’s younger, you might choose a 20-year term or even a 30-year term life insurance policy.
As you get older, your risk of dying increases. As a result, the cost of life insurance will go up over time. On average, a 45-year-old will pay 133% more per year for life insurance compared to an equivalent 25-year-old. (Here’s how much more you’ll pay if you wait to get life insurance.)
Feeling healthy? Perfect. Now is a great time to buy.
Getting a life insurance policy used to mean meetings with agents, going back and forth over pricing and paperwork, and waiting. Lots and lots of waiting. Then we launched Fabric.
Advanced algorithms help us review your application, which lets us allow most of our applicants to skip a health exam. Accelerated underwriting enables us to approve many applicants without a health exam for medically underwritten policies.
The online life insurance application takes around 10 minutes and includes questions on your health, lifestyle, profession, financial situation and more. That ranges from whether you’ve had any medical diagnoses to whether you enjoy skydiving on the weekends.
Best of all, you won’t need to talk to a salesy agent trying to upsell you to more complicated and expensive products that you may not need
If you’re a parent who’s putting off getting life insurance, you may be comforted by thinking your friends are in the same boat. But just because your friends haven’t told you they got a policy doesn’t mean they didn’t.
In 2021, one study found that more than a third of people plan to get insurance in the next year.
Some people you may not expect might have a policy. For example, while insurance is often positioned as a way to replace someone’s income, stay-at-home parents also need life insurance. After all, if the non-working spouse were to pass away, could the surviving spouse afford childcare? Would they need to step back at work (and potentially take a pay cut) to take on more tasks at home? What about everything else that the at-home parent does, from housework to driving a child to after-school activities?
Similarly, some single people need life insurance for a few different reasons. If you have co-signers on your loans (like parents who put their names on your student loans), those people could be responsible for some or all of your debts after you pass away. To protect them just in case, you might choose to get a policy to cover your debt. You might get an insurance policy for the time and amount left on your mortgage, to ensure that your spouse could afford the house in your absence. If you co-own a business, you might even get a policy to help your co-founder keep the company running through the disruption of your no longer being there.
Being a great parent starts with checking off the basics. You know the relief you feel when you take care of a lingering chore? That’s the feeling that most of our customers report after discovering how easy we make checking life insurance off the list.
Fabric exists to help young families master their money. Our articles abide by strict editorial standards.
Fabric by Gerber Life exists to help young families master their money. Our articles abide by strict editorial standards.
Information provided is general and educational in nature and is not intended to be, and should not be construed as, financial, legal, or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. We make no warranties with regard to the information or results obtained by its use, and disclaim any liability arising out of your use of, or reliance on, the information.
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