The reason for getting a life insurance policy might change throughout your life. Young, healthy couples with new babies may want a policy to protect their children if the unexpected happens. Older adults may be looking for a final expense policy to cover funeral arrangements and provide a legacy for loved ones. Regardless of where you are in your life, here’s information to help you decide if life insurance is worth it.

Who needs life insurance?

As a rule of thumb, if someone relies on you financially, you likely need life insurance. Life insurance is a contract between you and an insurer where you’ll pay a specified amount, or premium, in exchange for a guaranteed payment to your beneficiaries if you pass during the policy’s term. Loved ones can then use the payout from a life insurance policy to pay off debt, replace income, or pay for children’s education without worry. Knowing your family can easily handle financial concerns if you’re gone gives you and your loved ones peace of mind.

Who shouldn’t get life insurance?

While many people benefit from the financial security and peace of mind life insurance provides, some may not have an immediate need for coverage. If you’re young, healthy, single, debt-free, and have savings in the bank to pay for burial expenses, you may not need life insurance yet. However, when you are young and healthy is when life insurance is least expensive when you are young and healthy. So locking in coverage now could save you money in the long run.

Not sure if you need life insurance? Our agents can help you understand your situation and determine what policy best suits your needs.

Types of life insurance to consider

Your stage of life, financial goals, and budget are a few factors that help determine which type of life insurance policy is best. The most common types of life insurance policies to consider are:

Term life insurance

Term life insurance is an affordable policy option that lasts for a set number of years. If you pass away during the policy’s term, your beneficiaries will receive a lump sum payout. Terms often last between 10 and 30 years, depending on your age and life situation. For example, a parent of young children may opt for a 30-year term life insurance policy to cover income replacement while kids are at home and help fund college education in the future. On the other hand, someone who plans to retire debt-free in 10 years may opt for a shorter policy. Remember, the younger and healthier you are, the more likely you are to qualify for less expensive rates.

Permanent life insurance

Permanent life insurance, also called whole life insurance, is a policy that offers coverage for your lifetime as long as you continue to pay your premiums. What makes whole life insurance unique is its ability to accrue cash value. Part of each premium payment goes into the cash value account. Then, that money is invested, and you can draw from it while you’re alive if you want.

Permanent life insurance is typically more expensive than term life because of the cash value feature. That said, it will be less expensive if you lock in a policy at a young age. Permanent life insurance can also be a great choice for seniors. Fidelity Life senior whole life insurance options provide lifelong coverage at affordable rates. Plus, there’s no medical exam requirement, and policies can be issued up to age 85 in many cases.

Final expense insurance

Final expense insurance is designed for individuals ages 50 to 85 to provide financial protection for burial and other end-of-life expenses. Final expense policies offer affordable coverage without the hassle of taking a medical exam. These policies have a lower coverage limit than other options, and that means final expense coverage is often more budget-friendly.

Accidental death insurance

Accidental death benefit (ADB) coverage is an alternative for those who don’t qualify for other life insurance options or those who want to add a rider to an existing policy. There’s no need for a medical exam with ADB, and coverage is guaranteed. ADB could be worth considering if you have a health condition that disqualifies you for term life, you work a high-risk job, or you simply want extra coverage to support loved ones if you die from a covered accident.

What are the benefits of life insurance?

If you’re on the fence about life insurance, understanding the benefits it provides can make getting a policy worth it. Life insurance offers peace of mind, financial protection, and the ability to leave a legacy for loved ones, an organization, or a charity. Plus, since there are no restrictions on how the tax-free death benefit can be used, your beneficiaries can decide how to use the money, whether for income replacement, debt relief, or whatever they choose.

How to choose a life insurance policy

Choosing a life insurance policy comes down to a few easy steps.

• Calculate how much life insurance you need: How large of a policy you need depends on your life situation. Consider the number of dependents you have, current income and savings, outstanding debt, and any other financial obligations. Fidelity Life’s life insurance calculator can help you determine your needs with a few quick inputs.
• Look for affordable policies: It’s smart to compare policies to ensure your coverage needs are met at at price that works with your budget.  Consider the monthly premium amount and any available savings by paying policy premiums annually.
• Work with a reputable company: Several indicators can let you know you’ve found a reputable life insurance company. Look for companies with excellent life insurance ratings, Better Business Bureau (BBB) accreditation, and great customer reviews on trusted sites like TrustPilot. Fidelity Life is proud to be independently rated for financial stability.

When is life insurance worth it?

Life insurance is worth it when you have financial responsibilities. If there’s someone that would be financially impacted by your death, getting a life insurance policy can give you both peace of mind that there won’t be a significant financial strain if you pass away. If you’re on the fence about life insurance or have further questions, the Fidelity Life team is here to help. Get a quote online or speak with a licensed agent today.