Here's How 59% of Americans Endanger the Financial Future of Their Families – The Fool Motley

If you have a spouse or children, you probably do not want anything more than to provide and protect them. But if you do not have life insurance, you do not actually do anything to make sure that they are taken care of in case of premature death.

According to a survey released earlier this year by financial services firm Edward Jones, only 41% of Americans have taken out a life insurance policy. In addition, 32% say that life insurance is a low or no priority when they start a family.

If you are without life insurance, know this: without a policy, your loved ones could be left in the quandary if you died unexpectedly. Plus, there is no need to be rich to need life insurance. you just need people who depend on you financially or who may be hurt financially if you were to succeed. With this in mind, here is some more information about life insurance.

1. The shelf life is more profitable than permanent life

Life insurance is divided into two main categories. As its name suggests, term life insurance covers you for a specified period – usually 20 or 30 years. The permanent life insurance, on the other hand, covers you until your death. Permanent life insurance is therefore much more expensive than term life insurance because it offers a higher degree of protection.

But that does not mean that you need a permanent life insurance policy. If you are married with children, you may want your coverage to last until the age of retirement. Your children will grow up and go out alone. Your spouse will be entitled to social security and access to your IRA or 401 (k). If this is the case, a term life insurance policy would make more sense, especially if it allows you to save money on premiums along the way.

2. Permanent life insurance can double long-term savings

Unlike term life insurance policies, permanent life insurance policies accumulate a cash value as you pay them. So, they can double as a savings mechanism of sorts. This is because you will have the option to withdraw your contract later if you wish. By doing so, you give up the death benefit, but you can decide at a time of life that you want the money immediately, and with a permanent life insurance policy, you will have the money. option to do it.

3. It's not because you do not work that you do not need life insurance

Many people assume that if they do not actually earn a living, they do not need to take out life insurance. But if you are a stay-at-home parent, you should strongly reconsider. Even if you do not earn real income, the fact that you care for your children so that your spouse can work has a financial value. In other words, if you die, your wife should absorb the exorbitant cost of unaided child care. And this is not a burden with which you would like to leave your family.

4. You can take steps to keep your premiums more affordable

Many people assume that life insurance is prohibitively expensive, but there are things you can do to keep your premiums manageable. Start by applying when you are relatively young and in good health. Then, as mentioned before, go for the term life on permanent life. Plus, do not buy too much coverage. You probably do not need a $ 2 million policy if you are the only breadwinner in your family and earn $ 60,000 a year. Instead, a policy of a third of this size could very well meet the needs of your family.

The longer you stay without life insurance, the more you put your family at risk. If you do not have a policy in place, take some time to explore your options.