Life Insurance – Don’t be Afraid
Life insurance and wills make many people think of death. Most folks will go out of their way to avoid the topics. But in reality, both documents are really for the living.
For Jen Lare, her life insurance policy was a gift that allowed her to die in peace, said her husband, Kent.
“At least she knew financially we were taken care of. My wife was extraordinary,” Kent Lare said.
Early in their marriage, the Lares purchased a condominium. They also purchased life insurance. “It was second nature,” Kent said.
Several years later, Jen was diagnosed with breast cancer. It spread to her bones. She died at the age of 37. By that time, the couple had an young son.
“If it wasn’t for the life insurance, I can pretty much grant you we probably would have been filing for bankruptcy,” Kent said.
‘Love Letter From Beyond’
His experience is one that life insurance experts hope consumers will take to heart and learn from. September is Life Insurance Awareness Month.
“I call it a ‘love letter from beyond,’ ” said Karin Klaassen, of the Society of Financial Services Professionals. “We don’t call it ‘death insurance’ because it’s for the living.”
Anyone who has someone dependent upon him or her needs life insurance — whether it’s a spouse, a child, a family member or a friend.
Compared with other types of insurance, it’s the least expensive. There are basically two types: term and cash value.
Term life insurance is what the name implies — it’s only for a certain period of time, and it doesn’t build equity. If you’re still alive when the policy expires, there’s no payout.
Cash-value policies are more expensive because they build equity. They’re considered permanent because they can remain in force for life. Within the cash-value category, there’s a variety of products that offer flexible premium payments and even allow you to tie the value of the policy to the stock market.
Know What You Need
To figure out how much coverage you need and what kind of policy may be right for you, consider factors such as your mortgage, your children’s college costs, emergency fund needs and debt. If your household depends on dual incomes, you may want to cover the cost of your salary over a certain period of time as well.
Klaassen estimates a $200,000 term life insurance policy for a 40-year-old male nonsmoker in reasonably good health costs $40 per month. A cash-value policy for the same consumer may cost $185 per month.
Before purchasing any insurance policy, check with the Florida Department of Financial Services to make sure the product is legitimate and the agent selling the product is licensed. Call 1-800-342-2762.
For Kent Lare, life insurance allowed him to focus on grieving and taking care of his son. “You don’t buy life insurance for yourself. You buy it for people you care about,” he said.