If you have no family, no debts, and nobody depending on your income, you really don’t need life insurance. For the rest of us, the question isn’t whether we need it, it’s “how much will be enough?” Will your family be able to keep the house? Will your children be able to afford college? Will your grandchildren receive any inheritance? It’s essential that you make your decisions about life insurance now because there’s a drop dead deadline past which we all run out of time.
Illinois life insurance is not a one size fits all purchase. It is one of the most important decisions that you’ll ever make. Isn’t it better to know now that your coverage is appropriate to your needs? We’ve prepared this overview to help you understand the details and better prepare you to make that critical decision.
What is It?
The most basic feature of a life insurance policy is the death benefit: the lump-sum payment your beneficiaries would receive if you were to die. In the event of a tragedy, life insurance proceeds can help pay the bills, continue a family business, finance future needs like your children’s education, protect your spouse’s retirement plans, and much more. There are two types of Life Insurance – Term and Permanent
Term life insurance provides protection for a specific period of time — the “term” — and is designed for temporary circumstances. It makes the most sense when your need for coverage will disappear at some point, such as when your children graduate from college or when a debt is paid off. Term policies can be for one-year or up to 30 years or longer. Term provides the greatest amount of coverage for the lowest initial premium.
Permanent insurance offers lifelong protection and you can accumulate cash value on a tax-deferred basis. You can us this cash account for a variety of different reasons. However, permanent insurance premiums are much higher for the same face amount than term insurance. Permanent insurance falls into four main categories:
- Whole Life
- Premiums remain the same for life
- Death benefit and rate of return on your cash value are guaranteed
- Variable Life
- Allocate fixed premiums among investment sub-accounts such as stocks and bonds to get better returns
- Universal Life
- Flexibility in varying the amount of premium payments
- Guaranteed minimum death benefit as long as premiums are sufficient to sustain it
- Death benefit is reduced if minimum premiums aren’t maintained
- Variable Universal Life
- A mixture of Variable and Universal
- Premium payments adjustable, subject to minimum needed to keep the policy in force
- Allocate premiums among investment sub-accounts that provide varying degrees of risk and reward
Who needs life insurance?
When it comes to life insurance there is no rule of thumb on how much to buy. That is a personal assessment on how much you have to lose or how much you have to protect. Everyone has different financial circumstances as well as goals. One way to determine a need is to estimate your family’s needs after you are gone to meet immediate and future obligations. Then, add up the resources your surviving family members could draw on to support themselves. Examples of these could be: spouse’s income, accumulated savings, life insurance already owned, etc. The difference between the two is your need for additional life insurance.
Current and future financial obligations – spouse’s earnings, savings, investments, life insurance you already own = Life Insurance Needed
The math seems simple enough, but determining all the inputs can still be tricky like factoring in inflation and how much your investments will earn over the long run. Don’t fret, there is help. Contact one of our insurance specialists to discuss your current circumstances, your goals and what you want to accomplish and then together make a determination on what type of life insurance is appropriate for your needs.
LONG TERM CARE INSURANCE
Illinois Long-term care insurance. You probably have heard that it is too expensive or not necessary; maybe you think the likelihood of needing assisted in-home care or other higher levels of care “won’t happen to me”. The truth is, as Americans live longer and have access to better medical care, the possibility of needing long-term or custodial care becomes a much greater reality for many individuals. Much like life insurance, long term care can’t be obtained retroactively. If you wait to make a decision until you actually need it, you’ve waited too long.
What is It?
Isn’t long-term care insurance like long-term disability? Not exactly. Long-term disability protects you when you can no longer work. Long-term care insurance protects you when you can no longer take care of yourself.
Long-term care insurance was developed specifically to cover the costs of long-term care services, most of which are not covered by traditional health insurance or Medicare. Benefits are provided to individuals who need assistance in home health care, respite care, hospice care, adult day care, nursing home care or care in assisted living. Usually, long-term care assists individuals with activities of daily living (ADLs), which are bathing, eating, dressing, toileting, continence and transferring..
There is a great deal of choice and flexibility in long-term care insurance policies. You can select a range of care options and benefits that allow you to get the services you need in the settings that suit you best. The cost of your long-term care insurance policy is based on the type and amount of services you choose to have covered, how old you are when you buy the policy, and any optional benefits you choose, such as Inflation Protection. If you are in poor health or already receiving long-term care services, you may not qualify for long-term care insurance, or you may only be able to buy a more limited am0ount of coverage, or buy coverage at a higher “non-standard” rate.
Who needs long-term care insurance?
Anyone who has assets to protect and/or might not have enough assets to cover in-home care or care in other long-term care facilities for an extended period of time.
Ask yourself these questions.
- How greatly would your lifestyle be impacted if you or your spouse needed custodial care?
- How long would you be able to pay for care before your assets are gone?
- Do you want to be able to control who and where you or your spouse receives care?
- Wouldn’t you rather have your children supervise your care as opposed to doing the “heavy lifting”?
Long-term care insurance is a discussion between you and your spouse or loved ones to determine the best future care scenario to protect all involved . It is your money, you worked hard for it for many years. Protect the people in your life that mean the most to you – leave it to them, ensure that your legacy lives on.
To learn more about Long-Term Care Insurance and the many options or if it is right for you, please refer to our resource library or contact one of insurance specialists.