Create an Instant Estate with Life Insurance

The idea of creating an instant estate with life insurance may seem too good to be true, but rest assured, it’s not. For many healthy and even moderately healthy individuals, it’s a real option.

The key is understanding what life insurance is, the value it can bring to your estate plan and how much coverage you’ll need.

What is life insurance?

For the sake of estate planning, we’re going to focus on the more affordable and more common type of policy, term life insurance, which only pays out if you die during the coverage period.

Traditionally when people think of life insurance, this is the kind that comes to mind. It pays out only if you die during the policy coverage period.

How does it work?

You are paying the insurance company for security, so you can know that if you die during the term period, your beneficiaries will get a lump sum to help them pay bills, send the kids to college, live life without your income, whatever it may be.

On the other side of the table, the life insurance company sets your premium rates by determining the likelihood you outlive the policy term.

Simply put, they’re betting you won’t die during that time period, which is how they make their money. Truth be told, this is the reason a lot of people don’t see the value in life insurance.

It may seem like you’re paying for something that you will probably never use, and that’s true, if you’re lucky and outlive the term. However, that’s also why it’s called life insurance.

It’s literally allowing you to insure a certain sum of money will go to your heirs if you die unexpectedly.

Really, life insurance is peace of mind, and for many it’s very worthwhile.

What are the benefits?

Aside from protecting your loved ones from the loss of your income and contribution, term life insurance gives you a lot of options.

  • There are many different carriers, so pricing can be a bit more competitive
  • You have the option of choosing your term length
  • You can cancel anytime by simply not paying your premiums
  • You can purchase additional coverage as necessary

Choosing the term length puts you in the driver’s seat and allows you flexibility when navigating the changing stages of life. For example, if you need extra financial security while you’re raising your children, you can sign up for a 20-year term that will only cover you for that length of time, as in while you’re kids are under 18.

Additionally, if circumstances change and you need more coverage, you can apply for more coverage from your current carrier, or get another policy from a different carrier and still keep the original as well.

How do I figure out how much life insurance I need?

Many people already have an ideal number in their head for how much money they’d like to leave their loved ones, most of the time it’s just a matter of making sure that truly covers all the expenses left behind.

Try this simple calculator to determine what your family’s expenses will be when you pass and make sure you get the right coverage.