Understanding Life Insurance

posted 7/24/2015 in Insurance

Life insurance can be complicated to understand. However, it protects what matters most in your life: your loved ones.  From funeral costs and final life expenses to ongoing income and support, life insurance can provide you with peace of mind in case life throws you an unexpected curveball.

If you are thinking about life insurance for you and your family, it is important to first understand the different types:

  • Term Life Insurance: offers a fixed rate for a predetermined number of years. The policy can be determined by your age or life expectancy.

  • Whole Life Insurance: a permanent policy that is life-long and combines a death benefit with a savings or investment account in the form of cash value.

  • Universal Life Insurance: a type of permanent life insurance that can be adjusted and offers a little more liquidity.

  • Annuity: offers the option for you to receive income payments after you make an initial investment (often called an immediate annuity or deferred annuity). This is typically used to provide stable income for retirement.

With a variety of life insurance options, you may be wondering which type of life insurance is right for you.  When considering life insurance policies, here are some important things to ask yourself:

Am I single?  If you are single with no children, a large life insurance policy is not necessarily needed. Consider a small policy that would cover your final life expenses and funeral costs.

Just get married? If you just got married, re-evaluate your basic life insurance policy to help support your new spouse in case of your untimely death. Now is also a time to begin preparing for future life insurance policy changes as you may be considering buying a house or starting a family in the near future. 

Bought a house? Buying a house can bring on major financial changes. At this time, a more basic life insurance policy is still okay as you will need to consider other types of insurance, such as homeowners insurance.

Baby on the way? This is perhaps the most important time to re-evaluate your life insurance policy or to get a more substantial policy if you don’t already have it.  If you or your spouse were to unexpectedly pass away, one source of income might not be enough to care for both your spouse and your children.

About to retire? Life insurance may have provided you with a great sense of security when your family was young and depended on you. Now that your kids are grown, you may think you no longer need life insurance. However, holding on to life insurance or acquiring life insurance in retirement can still provide security for your spouse or even for your estate. If you plan to work during your retirement years, life insurance can also protect your spouse from loss of income.

Life insurance needs are unique for everyone. Let LSB Insurance provide you with peace of mind. Talk with our experienced life insurance agents to find the best policy for you!

LSB Insurance, a Lincoln Savings Bank Company

Not FDIC Insured | May Lose Value | No Bank Guarantee

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