Life

Buying life insurance may seem optional if you’ve never had a policy before, but it may actually be more important than insurance you buy for your home or your car. After all, a life insurance policy can protect your family from financial hardship and stress in the event of your untimely death, and what could possibly be more important than that? Of course, there are many types of life insurance you can buy. Variable life insurance is one of the main types to consider if you prefer to have lifetime coverage with an investment component. However, this type of life insurance comes with considerable risk that you should know about and understand before you consider purchasing a policy. What is variable life insurance? Variable life insurance is one of the more complex types of life insurance available, mostly because it includes an insurance component and an investment component all in one product. Variable life insurance coverage is permanent, meaning you’ll pay premiums for your lifeti...

Black Americans are more likely to carry life insurance than the average American, but their coverage does little more than provide for funeral costs. Fifty-six percent of Black Americans have life insurance, according to a study by LIMRA and Life Happens, compared with 52% of all Americans. But 46% remain underinsured, with their benefits not enough to replace income or provide wealth transfer across generations. But more coverage could help close the racial wealth gap, experts said, but many Black Americans are missing out because of financial concerns, a misunderstanding of how life insurance works, and mistrust of the industry at large. “What I hear is, ‘My parents didn't help me, so I'm just going to bury myself’…[leaving] every generation starting over, unlike other communities where they're giving legacy to the next generation,” Wendy Edwards, a financial services professional with over 30 years of experience representing New York Life and other insurers, told Yahoo...

It's possible—if your policy has a cash value While borrowing from your life insurance policy can be a quick and easy way to get cash in hand when you need it, there are a few specifics to know before borrowing. Most importantly, you can only borrow against a permanent or whole life insurance policy. Term life insurance, a cheaper and suitable option for many people, does not have a cash value and expires at the end of the term, which is generally anywhere from one to 30 years. However, in some instances, term life policies can be converted to a whole life policy that may make it eligible for a life settlement payment. KEY TAKEAWAYS Borrowing from your life insurance policy can be a quick and easy way to get cash in hand when you need it. You can only borrow against a permanent or whole life insurance policy. Policy loans are borrowed against the death benefit, and the insurance company uses the policy as collateral for the loan. Life insurance companies add interest to the bala...

  We review the pros and cons of term, whole-life and return-of-premium policies. LIFE INSURANCE COMES IN  three flavors. Term insurance offers plain-vanilla protection at a low cost. Then there's whole life, which has a savings component. A third type, the return of premium, is essentially a hybrid of the first two. Here at SmartMoney.com, we generally recommend term life, as its low premiums allow consumers to get maximum coverage at little cost. (They can then invest on their own the savings they'll reap by forgoing pricier options.) But don't just take our word for it. Before you head to an insurance broker's office, you should be familiar with the pros and cons of each policy type. Insurance agents are notorious for their heavy-handed sales tactics. Arming yourself with some knowledge ahead of time is the best way to make sure you wind up with the policy that's right for you. Term Life Insurance The Pros: It's cheap.  Term life is the most affordable varie...

In 2020, most Americans (54%) owned life insurance , up from 37% in 2019. Of the Americans who didn’t own a policy, the majority said the coverage was just too expensive, and many said they felt they didn’t need it, according to Statista. No matter if you have life insurance through your employer or you’ve purchased an individual plan, you may not have enough coverage to protect the ones you leave behind. But how much is enough? Is it worth buying life insurance? Because of the death rate from COVID-19, a survey by LIMRA found that 6 out of 10 Americans are now more aware of the need for life insurance, and 29% said they would likely buy a policy within the next 12 months. If you’re self-insured—which means you have substantial savings or investments and are entirely debt-free—you might not need life insurance. Otherwise, if something unexpected happens to you, your family may need a financial cushion to stay afloat. Do a life insurance calculation and compare insurance quotes. At what...

  Concerns include picking the wrong coverage amount, affording premiums and qualifying for coverage. Young adults have an upper hand when buying life insurance — they typically qualify for low-cost coverage due to their long life expectancies. But despite this advantage, a new survey by NerdWallet shows that younger generations are more likely than their elders to have hesitations about buying coverage. Sarah Fitch, a 23-year-old communication specialist in Ohio, finds the idea of buying life insurance overwhelming. “I’m afraid of getting the wrong policy or not getting enough coverage or getting an overpriced policy for low coverage,” she says. According to the survey, 86% of Generation Z (ages 18 to 25) and 77% of millennials (ages 26 to 41) say they have hesitations about purchasing life insurance, compared with 76% of Generation X (ages 42 to 57) and 70% of baby boomers (ages 58 to 76). The survey, conducted online by The Harris Poll in February 2022, involved more than 2,00...

There’s nothing more impactful than the loss of someone close to you to shine a light on the need for life insurance . And this past year, most of us have experienced some sense of loss, collectively if not personally, through the grief and suffering brought on by the global pandemic. Many of us who never before spent time thinking about or planning for our own death, or that of a loved one, likely found ourselves confronting this subject over the past year. The shift has been particularly significant among millennials, who now range from age 22 to 40, as they begin to plan for the next stage of their lives. One recent study found that millennials are the most likely to be influenced by the pandemic to purchase life insurance. Forty-five percent of millennials said they are more likely to buy life insurance due to COVID-19, compared with 15% of baby boomers and 31% of Gen Xers. And just as millennials have redefined everything from appropriate workplace attire to car-buying options, th...