Are you one of those people who are overwhelmed or underwhelmed when people start to talk about insurance? Or do you belong to those group of people who after purchasing life insurance, are still skeptical or confused about how the policy will impact their life? Well, this is gotta be your lucky day since you’ll be getting the answers today.
We’re sure enough that you are already aware of the financial benefits that life insurance provides to a covered person in the event of becoming ill. However, have you realized, that your insurance policy may also be utilized as a financial planning tool? There are many more other advantages you can get when you buy life insurance in North Carolina. That is only possible if you choose the correct life insurance coverage, then can you get the additional benefits.
Life insurance may appear to be a simple financial tool. In exchange for premiums, insurance firms give death benefits to policyholders’ beneficiaries. Such strategies, though, can be far more complicated.
To help you gain deeper knowledge about life insurance in North Carolina, we’ve broken down some facts you might not know yet.
Understanding Life Insurance
A life insurance policy offers financial security by agreeing with the insurance company to pay a specified amount to the policyholder’s designated beneficiary if the policyholder dies within the policy’s term. In return, the insurer commits to pay a monthly or one-time payment.
After your passing, life insurance pays out a sum of money or monthly payments to your dependents. This will give them financial support. The total amount they will receive, however, will depend on the value of the coverage you purchased. You will get the opportunity to decide how it’s divided and if it’ll cover certain expenditures like a mortgage or rent, or offer an inheritance to your family.
To some, one of the rites of passage into adulthood is purchasing a life insurance policy. And so below, we have gathered some data you probably may not have yet known about Life Insurance in North Carolina.
The 5 Things You Didn’t Know About Life Insurance
Here are 5 things your life insurance policy may do that you may not be aware of. And it’s not quite as intimidating as you might imagine.
Most individuals find life insurance to be unexpectedly cheap
Sure, some types of life insurance get more expensive when additional features are added. The cost increases if you smoke or have health issues too. As per the Insurance Barometer Study conducted by Life Happens and LIMRA, most individuals believe life insurance costs three times as much as it actually does. As an example, a healthy 30-year-old nonsmoking male can buy a $250,000 20-year level term coverage for roughly $16 per month.
Life insurance comes in a variety of forms
More than half of those who carry life insurance don’t know the difference between term and permanent policies. Term life insurance covers you for a set amount of time. For instance, you may buy a 10-year, 20-year, or 50-year term life insurance coverage. Your life insurance policy’s value will start to dwindle once this period has expired. If you pick permanent life insurance, you’ll be covered for the rest of your life.
One reason people may select term life insurance over permanent life insurance is that it is less expensive. You can be in your forties or fifties and assume that a 10- or 20-year coverage will suffice. Another reason why people choose term life insurance is that they can cash in their policy after they reach retirement age if they have a return of premium rider. This can be done to assist pay for unforeseen expenses such as medical bills or to save money for later living needs. Most individuals are unaware that the cash worth of their permanent life insurance can also be used for living costs.
May provide financial assistance in the event of disability or illness
If you believe that life insurance plans only provide financial assistance when the policyholder passes away, we’re here to inform you that’s not always the case. Accidental disability and critical illness riders are available in plans like HDFC Life Click 2 Protect 3D Plus. These riders pay the stated sum insured if the policyholder undergoes unfortunate events. Events like accidentally incapacitated or suffering from a serious illness such as a stroke, heart attack, or cancer. If you are unable to work and are facing growing medical and living expenditures, this might be a lifeline.
Cover the costs of your long-term care
Long-term care insurance is costly. Having to add a rider to a life insurance policy might be a good way to receive it. There are also special plans that combine life insurance with long-term care insurance. Incorporating long-term care benefits, whether as a rider or a specialty policy, decreases the death benefit amount.
Adding long-term care coverage to a life insurance policy comes with a premium. It might be less expensive than purchasing two separate policies. It’s also a fantastic option for those who want long-term care insurance but don’t know if they’ll need it.
Build on your legacy even more
Another innovative approach to utilizing life insurance is to immediately reinvest dividends that would otherwise be paid out in cash instead of accepting them.
The sum your beneficiaries get upon your death can rise significantly by reinvesting a policy’s income – without you having to spend any additional money out of pocket.
As a result, by utilizing profits to build a larger life insurance pool, you can be more charitable to your heirs, paying out higher sums to chosen individuals. Or simply leaving money to a broader number of recipients.
The reality about life insurance is that it provides more than simply financial protection to your loved ones in the event of your passing. Such life insurance myths must be debunked so that more individuals may learn that life insurance plans are worth investing in. It can also be used as a loan collateral, a tax-free income source, and to help you achieve your retirement goals. You also have the option of waiving your premiums in the event of an unintentional disability or sickness.
Know more about these by talking to our friendly agents. Harbor Insurance offers several insurance types that you may need in this lifetime. We look for the best possible pricing to your liking. We work with experts and reliable connections to ensure you stay in a safe and protected home. Whether you are in the Mountains, Piedmont, or Coastal Plains region of our state, we have you covered.
Make an appointment today to discuss how to best insure your home in Washington, NC!