Life insurance 1 is something people in many different situations and stages of life should consider.
Even knowing this, you may still wonder why life insurance would be a good fit for you. Below, we break down the kinds of expenses life insurance can cover. Understanding the significance of life insurance can contribute to the well-planned future of you and your family.
8 Things Life Insurance Can Cover
An income stream
Your family depends on your income to meet daily needs like food, medical care, utilities, car payments, and much more. If you pass away without a means for replacing that income, your current standard of living could be in jeopardy. It’s especially important for single parents to have a plan in place to provide for their child(ren).
A mortgage
Could your family afford your home’s mortgage without your paycheck in the picture? If not, your family could face losing the house they love. Moving could also mean changing school districts and moving away from friends and loved ones during a difficult time.
A college loan
College tuition has grown faster than inflation—and so has student loan debt. Many private lending institutions do not forgive education loans in the event of death. That means the debt may reduce the amount of assets available to pass to the beneficiaries of a deceased student’s estate. It could also trigger repayment obligations for anyone who agreed to be a cosigner on the loan.
Your good health
You’re more likely to be in better health when you’re younger, making life insurance much more affordable. None of us knows what’s in store, so there’s never a better time to protect your life and loved ones than now. By adding a Guaranteed Insurability Option Rider (GIO)3, you can lock in your great rate and health. This helps protect your insurability in the event the unexpected happens, as it did for one young woman after a serious health diagnosis.
A child’s needs
The U.S. Department of Agriculture says it costs $233,610 to raise a child who was born in 2015, although more recent numbers from the Brookings Institution put the cost at about $310,600. Making sure there’s enough there for each child is something both employed and stay-at-home parents should consider.
A business
The right life insurance is critical if you own a business. This is especially true if a business has partners. If one passes away, it is advantageous to have funding in place for the surviving partner to buy the deceased partner’s interest in the business. Funding must also be in place to help a business survive after a key partner passes. Finding the right person may take time and resources the business may not have without life insurance. That’s why Key Person Life Insurance and Business Continuation coverage is so important.
A retirement
According to Fidelity, you should aim to save 10 times your annual pay to retire at age 67. (You’ll need even more if you retire earlier.) Options like annuities and a Traditional or Roth IRA can help you easily prepare for retirement and help provide for your surviving spouse if needed. With an annuity, you can collect a steady income stream in retirement to help cover regular expenses, including life insurance premiums.
Funeral expenses
According to a 2021 NFDA study, the median cost of a funeral is almost $9,500. While cremation costs less – around $7,000 – and is becoming a more popular choice, it’s still a hefty expense, especially if the deceased was unprepared. Families without enough funds are forced to cut back on the service, ask friends and family for donations, or turn to crowdfunding.
Protection for Life
Life insurance needs vary from person to person. If you’re interested in learning which one is right for you, contact a knowledgeable advisor like one of our local agents in your community. They can help you identify which priorities life insurance can help you plan for and help you find the right protection at the right price.
ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York). The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.
The insurance products and rates, if applicable, described in this blog are in effect as of January 2024 and may be changed at any time.
Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions.
The insurance products and services described in this blog are not offered in all states. ERIE life insurance and annuity products are not available in New York. ERIE Medicare supplement products are not available in the District of Columbia or New York. ERIE long term care products are not available in the District of Columbia and New York.
Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.
Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.
