In life, there are various costs that we consider ‘necessary’ and these include food shopping, rent, bills, and all the things we need to survive. However, this often means that life insurance is left out in the cold. Not so long ago, the amount of Americans with an active life insurance policy actually hit a 50-year low. Of course, this led to instant accusations of confusing products, unemployment, and all sorts of others reasons were also blamed. Whatever the reasons, millions of Americans are currently without vital protection.
In total, reports suggest that 35 million US households have no life insurance at all and this includes 11 million households with children under the age of 18 years. If we break this down again, over 40% have said that, if the main income generator was to die, they would struggle to cover everyday expenses. With this information in mind, it is shocking and saddening to see the sheer amount of people risking no life insurance.
Buying Life Insurance
In truth, there is a lot of confusion and many misconceptions surrounding life insurance but we have some advice for you today. Before you grab your laptop and immediately look for life insurance in Miami, experts say that not everybody needs it. For example, many older generations have no children or members of the family that are dependant on them. As long as there is money to cover funeral expenses and the mortgage is paid, they can let their current policies lapse without worrying too much.
Do You Need Coverage in Miami?
Not so long ago, an industry expert said that if you have someone dependant on your income, you should have life insurance. Although it isn’t nice to think about, you need to consider what will happen to your loved ones if you were to pass away. If they are reliant on your income, there is no doubt that protection needs to be installed in the shape of a life insurance policy.
In the long-term, there is no reason why you can’t reassess. For some reason, there tends to be a misconception that life insurance needs to last until you die but this isn’t true. With term life insurance, you can have a policy that ends once your mortgage is paid or as soon as your child becomes an adult.
How Much Coverage Do I Need?
Whilst some say you should purchase 15x your current income, others suggest 3.5x your income plus any outstanding debts. As soon as you decide (or get help from a professional advisor), you then need to decide what type of insurance you want. In truth, there are two main options – term life and permanent life insurance. Whilst one covers a set period of time, the other lasts until death but both offer a death benefit for a beneficiary. As mentioned previously, you might want to cover a mortgage or until the child goes to university.
With permanent life insurance, things are a little more complex because it includes a ‘cash value’ which is a savings portion of the policy. Above all else, the benefit of permanent insurance is that you don’t have to worry about renewing once it runs out because it lasts until death. Also, many wealthy people use life insurance for estate planning because the cash value is normally tax-free after building for numerous years.
Finally, you always need to keep the insurance company in mind. Whether they are located within Miami or somewhere else in the US, they need to be registered and legal; A.M. Best’s ratings are a good place to start. At first, life insurance can be intimidating but the process can actually be very simple. If you need help, there is no shame in contacting a finance professional for assistance!