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A life insurance policy is designed to help protect your family financially in the event you unexpectedly pass away. It can help ease their money-related stress and help them move forward with their lives.
Life insurance can be a good investment if you want to help ensure your loved ones are financially secure after your passing. There are many types of policies that come with their own enhanced benefits. If you’re wondering whether you need life insurance, let’s dive deeper into how it works so you can decide if getting a policy is worth it for your unique situation.
Once you apply for a life insurance policy, you’ll make regular payments known as premiums. In exchange for your premiums, the life insurance company will agree to pay your loved ones or beneficiaries a lump sum of money known as a death benefit upon your death.1
Your loved ones can then use this money to help with a variety of expenses, like your funeral, the mortgage, debts, and college tuition. With life insurance, you’ll know your family will be better covered financially if you suddenly pass away.
There are many life insurance policies that may be worth it for your needs, including:
With term life insurance, you can receive coverage for a set term. In many cases, this term is anywhere between 10 and 30 years. The death benefit will only be paid out if you, the policyholder, die during this term.2 Term life insurance typically comes with lower premium rates.
Whole life insurance is a permanent policy that provides coverage for the rest of your life, rather than a set term. It usually features a death benefit and cash value component, which earns a fixed rate of return.3 You might be able to access your policy’s cash value while you’re living. Compared to term life insurance, a whole life policy is often more expensive. If you’re wondering whether whole life insurance is worth it, consider whether you need lifelong coverage.
A universal life policy is a flexible type of life insurance. It can allow you to decrease or increase your premium payments as your circumstances change.4 If you do lower your premiums, your beneficiaries will likely receive a lower death benefit in the event you pass away. Although Aflac does not offer this type of policy.
Also known as burial insurance, final expense life insurance helps pay for end-of-life expenses. These may include funeral and burial costs as well as any other medical expenses your beneficiaries will need to settle after you die.5
Guaranteed issue life insurance is a permanent policy you can take out without having to answer health questions or complete a medical exam.6 It might come in handy if you’re struggling to purchase other types of life insurance policies or have a limited budget.
Don’t wait until it’s too late. Help cover yourself and your family with coverage from Aflac.
When deciding whether life insurance is worth it, it’s important to factor in the cost you’ll pay for a policy. The cost of life insurance varies and will depend on several factors, such as your age, gender, health status, and coverage amount. The younger and healthier you are, the better rates you’ll be able to land.
There are many benefits that can make investing in a life insurance policy worth it. First and foremost, life insurance can help your loved ones pay for funeral expenses if you unexpectedly pass away. It can help ensure your family can better maintain their standard of living in your absence. In addition, permanent life insurance policies like whole life insurance can accumulate cash value, which you can take advantage of while you’re still living. Once your cash value is large enough, you may be able to withdraw from it, get a life insurance loan, or use some of it to pay premiums.
Life insurance can be a worthwhile investment if the following situations apply to you:
Do you have a partner or children that depend on you financially? If so, life insurance can protect them if you suddenly pass away. Without a policy, your loved ones might struggle to support themselves and move on with their lives.
If you have debts, like a mortgage, car loans, or student loans, your family will be stuck with them upon your death. A life insurance policy can help provide them with the funds they need to pay off your debts.
Since life insurance provides your loved ones with a death benefit after you pass on, it’s a great way to preserve your financial legacy. Your beneficiaries could receive a tax benefit. You may want to talk to a tax advisor to better understand your options.
Even if you don’t have a traditional job with a salary, getting life insurance is a good idea as it can help pay for the services you provide if you pass away. These may include cleaning, cooking, and childcare.
Life insurance can be a good investment that helps provide a financial safety net and give you and your family some much-needed peace of mind. If you’ve decided life insurance is worth it for you, Aflac offers life insurance plans such as term and whole life insurance that come with extensive coverage and other benefits. Request a quote today!
1 Investopedia - Life Insurance: What It Is, How It Works, and How to Buy a Policy. Updated December 22, 2022. https://www.investopedia.com/terms/l/lifeinsurance.asp. Accessed March 28, 2023.
2 Investopedia - Term Life Insurance. Updated Aug 20, 2022. https://www.investopedia.com/terms/t/termlife.asp. Accessed March 28, 2023.
3 Investopedia - Whole Life Insurance Definition: How It Works, with Examples. Updated September 7, 2022. https://www.investopedia.com/terms/w/wholelife.asp. Accessed March 28, 2023.
4 Nerdwallet - What is Universal Life Insurance? Pros, Cons, and Cost. Updated January 10, 2023. https://www.nerdwallet.com/article/insurance/universal-life-insurance. Accessed March 28, 2023.
5 Investopedia - What Is Final Expense Insurance. Updated Aug 20, 2022. https://www.investopedia.com/final-expense-insurance-4801018. Accessed March 28, 2023.
6 Investopedia – Guaranteed Issue Life Insurance. Updated September 14, 2022. https://www.investopedia.com/terms/g/guaranteed-issue-life-insurance.asp. Accessed March 28, 2023.
Aflac insurance coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage underwritten by American Family Life Assurance Company of New York.
Final Expense Whole Life Insurance is underwritten by Tier One Insurance Company.
The life insurance policy described herein contains an optional Accelerated Death Benefits Rider that is intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code. Aflac does not give legal or tax advice. Please consult with a qualified legal, tax, and accounting advisor before engaging in any transaction. In AR, AZ, ID, OK, OR, PA, TX and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22
Life – 68000 Series - In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400. Term/Whole Life – B60000 Series – In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Group Whole Life - Q60000 Series - In Arkansas, Policy Q60100CAR. In Delaware, Policy Q60200M. In Idaho Policy Q60100CID. In Oklahoma, Policy Q60100COK. In Oregon, Policy Q60100COR. In Texas, Policy Q60100CTX. Group Term Life Q60000 Series - In Delaware, Policies Q60200C. In Arkansas, Idaho, Oklahoma, Oregon, Texas, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C.
The content herein is provided for general informational purposes and is not provided as tax, legal, health or financial advice for any person or for any specific situation. Employers, employees and other individuals should contact their own advisers about their situations. This is a brief product overview only. Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY, or VA. Benefits/premium rates may vary based on plan selected. Optional riders may be available at an additional cost. Plans and riders may also contain a waiting period. Refer to the exact plans and riders for benefit details, definitions, limitations and exclusions. For availability and costs, please contact your local Aflac agent/producer.
Aflac’s family of insurers include Aflac, Aflac New York, Continental American Insurance Company, and Tier One Insurance Company.
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