Life Insurance

Life insurance is a vital part of planning to protect your family in the event something happens to you. There are a few different kinds of life insurance, so it's important to explore your options to find the right policy and plan for your needs. A life insurance policy can pay for your funeral expenses,

Life insurance is an insurance policy that provides a lump sum to your heirs or beneficiaries, known as a death benefit. You pay premiums so that your children or spouse can have a lump sum after you die. The beneficiaries can use this money however they choose, such as paying bills, paying off a home loan, or paying for college tuition. Affordable life insurance is a financial safety net for your family.

The Two Primary Types of Life Insurance
Permanent life insurance, also known as universal life or whole life insurance, provides lifetime coverage, while term life insurance only provides coverage for a certain period.

Term Life Insurance
Term life insurance is a more affordable life insurance policy and is the most popular form of life insurance. It provides coverage for a set period of time, such as 10, 20, or 30 years. If you die during the term of this policy, your heirs can make a claim and receive the death benefit without paying taxes on it. Once the term expires, you may have the option to renew the policy in increments of one year. However, each year of renewal will be at a higher rate, so you could end up paying more and more over time.

Permanent life insurance
Permanent life insurance provides lifelong coverage, and the premiums are typically higher than term life insurance ones. It builds cash value, which is tax-deferred. You may be able to borrow money against the value of your life insurance or choose to end the policy and receive the cash value. Cash value builds slowly over time, though, so you may not have a lot of value built up right away.

There are a few different types of permanent life insurance.
Whole life insurance has a cash value that grows at a guaranteed rate of return. It also has a fixed death benefit so that you can plan for a specific amount to go to your beneficiaries.

Universal life insurance is more flexible than whole life insurance. You may be able to change the death benefits and alter your premium payments according to the terms of your policy. The cash value of a universal life insurance policy depends on what type of policy you have.
Burial insurance is a small life insurance policy intended to cover your funeral costs.

Survivorship life insurance covers two people under one policy, usually a married couple. When both spouses pass, the death benefit is issued to the beneficiaries.

Every person's financial situation and beneficiary relationship is different, so it's essential that your life insurance quotes meet those needs.

How can I determine whether I need life insurance?
If you have dependent children or a spouse, then you need life insurance to provide for them in the event of your death. Your spouse may be unable to work because they need to care for minor children. The death benefit can help support your family.

What does life insurance cover?
Life insurance covers whatever financial needs your beneficiaries have. It can cover the cost of your funeral expenses and be used to pay off debts you have, such as a home mortgage or car. Or, your family may use the money to pay for college tuition or save the money for an emergency.

How much life insurance do I need?
A good rule of thumb for determining the amount of life insurance you need is to add up all expenses you want to cover, including mortgage college expenses, and cover any potential income you won't be earning. Then, subtract the amount that your family needs to cover these expenses. That's how much life insurance you need.

Do you need life insurance? Don't navigate this complex process alone; work with a professional that can review your options with you. At Sapphire Wealth, we can help you find the right life insurance policy for your needs and budget. Or we can structure your life insurance policy as part of your overall wealth management strategy. Contact us today to schedule a consultation.