Most people understand the primary benefits of having life insurance : Your family gets money if you die unexpectedly – and you get the reassurance of knowing they’ll have resources to help carry on without you. While those benefits are generally true for all kinds of life insurance, there are other important advantages depending on the specific type of policy and amount of coverage you get. There are also benefits for women, too.
There are many benefits of having life insurance
All life insurance can give you financial confidence that your family will have financial stability in your absence. But generally, the more life insurance you have, the more benefits it will provide to your family when needed. For example, some people receive a nominal amount of life insurance – say $25,000 – through their workplace. While that theoretically sounds like a nice sum of money, in practice it may only be enough to cover funeral expenses and a few mortgage payments. But with a larger coverage amount, your family can realize far more benefits, such as:
Income replacement for years of lost salary
Paying off your home mortgage
Paying off other debts, such as car loans, credit cards, and student loans
Providing funds for your kids’ college education
Helping with other obligations, such as care for aging parents
Protect your mortgage
Taking out life insurance to cover your mortgage can provide peace of mind your mortgage will be paid off, and your loved ones can continue living where they’ve always lived, if you were to die. If you want to protect an interest-only mortgage, where the outstanding balance doesn’t reduce over the mortgage term, this will usually need to be covered using level term insurance. If you have a repayment mortgage, you could consider decreasing term life insurance, where the potential payout reduces in line with the balance left remaining on your mortgage, and can help keep premiums lower.
If you are planning to cover mortgage costs by using life insurance products, it’s important to regularly check that you have the correct amount of cover and that you make any necessary changes to your policy in line with changes to your mortgage situation.