Smoky Mountain Life Insurance.
A Smart Planning Tool for Your Life
Life insurance can feel complicated and overwhelming, but at its core, it’s a pretty simple way to plan for the financial future of the people you love. Learning what life insurance is now can help you make informed decisions about the right ways to keep your family protected.
Lee Lofton State Farm know from experience how much life insurance can help people when they need it most, and they work with customers every day to help them understand what life insurance is, and what a difference it can make. Several State Farm agents have contributed their knowledge and experience to this article.
Ken Quach explains what life insurance is really well: “It’s a planning tool to ensure what you want to happen will happen, whether you’re here or not.” And that’s really what it’s all about. None of us can predict the future. Most of us hope to be around for a long time. We want to grow old with our families, run our business until we’re ready to retire, give back to our communities for years to come. But one thing that’s guaranteed about the future is that it has no guarantees, and we don’t know how long we’ll live. Life insurance is a way to help protect against this uncertainty, and it’s a way we can feel more in control of the unknown.
How Does Life Insurance Work?
How life insurance works is pretty simple. You buy a life insurance policy and name a beneficiary to receive the death benefit. If the policy is active when you pass away, your beneficiary will receive that death benefit. As Denise Elliott, State Farm agent in Durango, Colorado, describes it, “It’s like having someone who will take care of your family financially if you couldn’t, due to an untimely death.” It can be a great comfort knowing if something happened to you, your family can stay in their home, stay in the same schools, and keep living the life you’ve dreamed for them.
And while most people buy life insurance because they want to protect their family, it also offers a lot of benefits for small business owners and can even be a way to leave money to a favorite charity. If you have a business to protect or an organization you’re passionate about, an agent can help you understand your life insurance options.
Agents also get a lot of questions about the cost of life insurance, and it can be helpful to look at cost in two different ways – the cost of having it, and the cost of not having it.
The cost of having it — The cost of life insurance varies, based on factors like the type of life insurance you purchase, the amount of life insurance coverage you want, your health, and your age. The younger you are, the more affordable it typically is. As Quach explains, “I always tell people when you buy life insurance, today is the least expensive day you can purchase it.” That doesn’t mean it becomes unaffordable as time goes on though, and most people think life insurance is more expensive than it actually is. Sitting down with an agent to talk through your budget and your goals can help you find the protection that makes the most sense for you.
The cost of not having it — This is even more important to consider. Take a moment and think about what you provide for your family now. Do you provide income they need for the mortgage and other expenses? Do you contribute to their future savings? Do you help with child care? Cooking? Shopping? Home maintenance? Now imagine if you weren’t here. What would your family’s life be like without you in it? How would they be affected financially? What would the cost to their future be without life insurance? That’s the cost of not having it.
Types of Life Insurance
Though life insurance serves the same basic need (providing a death benefit if something happens to you), different types of life insurance work in different ways, and offer additional benefits. Patrick Blevins, State Farm agent in Lexington, Virginia, likes to put life insurance into two categories – short-term protection and long-term protection.
Short-term protection — Term life insurance falls into this category. “It’s like renting a place,” says Blevins. You buy a policy for a specific amount of time, commonly for 10, 20, or 30 years. If you die during that time, your beneficiary receives the death benefit. If you’re still alive at the end of that time, your policy ends. “What’s good is that you can buy a lot of coverage for not a lot of premium.”
Long-term protection — This is how Blevins often refers to permanent life insurance, which includes variations such as whole life insurance and universal life insurance . He describes it as “owning a home, it’s yours.” It’s lifelong coverage and, like term coverage, provides a death benefit to your beneficiary if you die.