Before you get life insurance coverage, you should understand why you need it. Although there are many reasons to buy life insurance, the most common reasons are:
- Final expenses: Final expenses refer to any expenses related to someone’s passing. This can include a casket, funeral, preparations, memorial service, cremation and more. Life insurance for final expenses is worth considering—after all, the National Funeral Directors Association reports that the median price for a casket funeral is about $7,850. Families without enough money are forced to cut back on services or ask friends and family for donations. Some families have turned to crowdfunding to cover the costs. A modest term life insurance policy can relieve your loved ones by taking care of these expenses.
- Income compensation: Your loved ones depend on your income to meet daily needs for food, healthcare, aids, car payments and more. There are also future expenses such as a child’s college education or contributions you would have made toward a surviving spouse’s retirement. If you pass away without the ability to replace your income, their standard of living could be in serious jeopardy. Having life insurance in place can help provide financial security and the ability to maintain your current lifestyle (especially if you stay at home with young children). How much life insurance you need is based on two factors: your salary and the number of years until you retire. An insurance agent will also consider other factors such as Social Security benefits, your partner’s income, your debt and your savings. Always aim to buy the amount you really need – but also remember that something is better than nothing when it comes to life insurance. (Spoiler alert: it’s cheaper than you might think!)
- To pay off a mortgage: A mortgage is often the largest single line item in a person’s budget. Could your family afford your home’s mortgage without your salary in the picture? If not, an already sad situation would be compounded by the family possibly losing the house they love. This may also mean that your children can no longer attend a school in their current district or maintain the friendships they currently have. Life insurance can pay off an outstanding mortgage so your family can enjoy the home they love without the burden of outstanding payments.
These are the three most common reasons people buy life insurance. Still, there are many other reasons to buy life insurance, such as building or leaving an inheritance, saving for retirement, protecting student loan co-signers, and more.
Life insurance=Love insurance
February is Insure Your Love month and the campaign is coordinated every year by Life Happens. Be sure to contact us today to insure your love with life insurance.
Life Happens is a nonprofit organization dedicated to helping consumers take personal financial responsibility through ownership of life insurance and related products. Life Happens Pro furthers its mission to educate the public by making its resources customizable and putting them directly into the hands of agents.
ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home office: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York). The companies within the Erie Insurance Group are not licensed to do business in all states. See the company’s licensing and business information.
The insurance products and rates, if applicable, described in this blog are effective as of July 2022 and are subject to change at any time.
Insurance products are subject to conditions and exclusions not described in this blog. The policy contains the specific details of coverage, terms, conditions and exclusions.
The insurance products and services described in this blog are not offered in all states. ERIE life insurance and annuity products are not available in New York. ERIE Medicare supplement products are not available in the District of Columbia or New York. ERIE long-term care products are not available in the District of Columbia and New York.
Eligibility will be determined at the time of application based on applicable underwriting guidelines and rules in effect at that time.
Your ERIE agent can offer you practical guidance and answer any questions you may have before you buy.