The Risks to Clients’ Assets Without the Protection of Life Insurance

Although many people feel that they don’t need life insurance (or that they are adequately protected with only employer-sponsored coverage), the reality is that there is a long list of situations in which people could be leaving their loved ones with a substantial financial burden in the case of the unexpected.

This can even be the case if an individual is retired, and / or if his or her dependent children are no longer relying on their income. Just some of these needs can include the following:

 

Final Expenses

One of the primary reasons for purchasing life insurance is to ensure that one’s funeral and other final expenses are paid for. Today, the average funeral in the United States can cost upwards of $8,500 – and in many cases, payment will be due at the time of service, or very soon afterwards.

So, in addition to the emotional trauma of losing a loved one, a family could also be put into a difficult financial situation – one that could involve adding a significant amount of debt, or dipping into savings that were already earmarked for other things.

 

Debt / Mortgage Payoff

Given the massive amount of debt that many families carry, it is possible that an individual could leave their survivors with added financial responsibilities in the event of the unanticipated.

This could include a home mortgage balance, as well as a vehicle loan, credit card debt, and possibly even business debt obligations. But the income tax free proceeds from a life insurance policy could be used for reducing, or even completely eliminating, these debts.

 

Income Replacement

While life insurance is oftentimes purchased as a source of income replacement for young families with dependent children, this financial vehicle can also provide the same type of benefits to couples who are retired.

For instance, oftentimes the amount of an individual’s pension income will be reduced, or even eliminated altogether, when he or she passes away. But if there is a spouse or partner who is depending on that incoming cash flow for the payment of their living expenses, they may have to drastically change their lifestyle if the income stream suddenly disappears.

Here, too, the proceeds from a life insurance policy could be converted over into an ongoing income stream so that the survivor can continue to maintain their same standard of living going forward.

 

Purchasing Life Insurance Now Versus Later

When there is a need for life insurance, it is typically best to purchase coverage sooner rather than later, as an applicant’s age and health condition will factor into the premium price, as well as into the insurance carrier’s underwriting decision.

With that in mind, as an individual ages, their potential for health related issues can also increase, in turn, making them a higher risk to the insurance company – and if one’s health deteriorates significantly, then the applicant may not qualify for the coverage at all.

Do you need more prospects for life insurance to keep your business flowing smoothly?

If so, we can help. Join thousands of other life insurance professionals who enjoy spending less time cold calling and more time actually sitting in front of people who want to hear from them. For more details, just give us a call, toll-free, at 1-800-643-6143 to learn more.

 

 

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Brian J. Kay, Executive Director, Leads4Insurance
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