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By Andrew Denton. Last updated 01/29/2024.

Why Life Insurance is Your Financial Safety Net

Based on a true story: A lady named Kai contacted her car insurance agent with an unusual request. She needed help searching for her late mother’s life insurance policy. Kai, the person whom the family depended on most, was trying to pick up the pieces left after her mother’s tragic passing. Despite turning her house upside down, the policy was nowhere to be found. But Kai had two things going for her: she knew a knowledgeable insurance agent and believed this policy existed—she just needed to find it. So she called the agent, who provided a resource:

“Our state has a Department of Insurance,” the agent said. “The department is connected to all of the life insurance companies that are registered in the state. As long as you’re the beneficiary of the policy, you can search through the department’s channels and be notified if the policy exists.” 

The search began with optimism but ended painfully. The policy had expired years ago due to missed payments. Kai’s experience brings us to an important question: What exactly is life insurance meant to accomplish?

Understanding Life Insurance

Why did Kai need to find this policy? The money could have been intended for various reasons, such as:

  • Her kids’ college education or down payments for their future homes.
  • Serving as a financial cushion for lost income or settlement for her mom’s unpaid bills.
  • Covering the cost of her mother’s funeral and burial.

Did she have enough money to bury her mom? We don’t know, but one thing is certain—her mom had just died, and instead of having the space to grieve or celebrate her mom’s life, she was stressed about money—that’s a painful thing to go through. Understanding why you might need life insurance is essential, but knowing what options are available to you is equally important.

Your Options: The Types of Life Insurance

When it comes to life insurance, there are generally two kinds:

Term Policies: Think of this like a Netflix subscription. You pay in monthly or annual installments and get coverage, but if you stop paying or the term ends, that’s it—no more benefits. The coverage is for a set time—or term—like 10, 20, or 35 years. If you pass away during that time, your family gets the money. These term policies are fairly straightforward and tend to be less expensive.

“Permanent” Policies: This one’s similar to buying a forever home. You generally own this for the rest of your life and can even build ‘equity,’ or cash value, over time. The cash value is your money that you can use later on. “Permanent” policies, like whole life and universal life policies, have more moving parts, can be modified to suit more complex needs, and tend to be more expensive.

Now that you’re familiar with the different types of life insurance let’s explore how these options can serve your personal and even business-related goals.

#Goals: Securing Your Loved Ones and Ensuring Business Continuity

Life insurance can be a safety net or even a launch pad for your loved ones. Imagine not worrying about how your final expenses will be paid, how your family will live, or whether your kids can afford college, housing, a wedding, or even seed money for a business venture. Imagine leaving behind memories and a financial foundation for your family to build upon. That’s the gift of life insurance.

Life insurance is mostly seen as personal coverage, but it can safeguard your business interests, too. For business owners, life insurance funds ‘buy-sell’ agreements. These agreements between business partners provide financial security to the business and the deceased partner’s family. It helps ensure business continues smoothly even if a partner is no longer around.

Forbes Advisor notes that “many people buy life insurance after getting married, having a baby or buying a house.” However, life insurance may be needed in other circumstances, as well. Although the benefits of life insurance may seem obvious, there are common misconceptions that deter people from taking action.

Common Misunderstandings About Life Insurance

“I’m Too Young to Need Life Insurance”: Accidents can happen at any age. The earlier you start, the lower the policy price.

“Life Insurance is Too Expensive”: In most cases, there are options for every budget. With life insurance, you’re taking hold of your tomorrow. It’s hard to put a price on peace of mind.

“I’m Single With No Kids; Why Bother?”: Even single people with no kids have financial obligations. Life insurance can cover debts, funeral costs, or be left as a legacy to someone else or even a cause you care about.

Debunking these myths is a step forward, but the real difference comes from proactive planning.

Be Proactive, Not Reactive

When Kai’s story is shared, people often wonder what happened to her. Frankly, the end of this part of her story wasn’t happy. But she is part of the reason Green Brook exists. Being proactive includes not just buying insurance but also managing it properly. Our Client Care Team can alert you and a beneficiary (like Kai) if a policy lapse is threatened. Cautionary tales like hers and others help us see insurance for what it is: Protecting your wealth, income, and, in some cases, your family’s financial future. Our loved ones shouldn’t have to scramble during an already difficult time. They are worth more than that to us. Click here to call in so we can explore your options and take steps towards a better future. Ensure that the people you care about are cared for when you’re not around.

Kai’s experience serves as a reminder of the importance of timely action. What steps can you take today to secure a better future for your loved ones?

Life insurance isn’t just a policy; it’s a promise to safeguard the ones you love and establish a lasting legacy. Don’t wait until it’s too late. Act today.