Table of Contents
Despite the benefit of life insurance for consumers, Royal Bank of Canada recently decided to stop selling several life insurance products because of economic changes. Low interest rates, a volatile equity market and tougher regulations have adversely affected the life insurance industry. MSA Research, INC chief executive Joel Baker sites the “low interest rate environment” as the core reason behind the industry’s changes.
Although the economy deters some companies from offering term or whole life products, consumers can still buy direct insurance from Kemper and other companies to get comprehensive protection for every area of their lives. These companies provide education about risk and coverage that can be an important resource for anyone needing a policy. Here are just some of the things you’ll need to know:
Why Buy Term Life?
For families with young children and a limited budget, five to 30 year level term life coverage remains an affordable option. According to LIFE Foundation’s President and CEO Marvin Feldman, a 20-year, $250,000 level term life policy costs $150 per year for a healthy 30 year old. At this price, most adults can afford coverage.
While young consumers receive the most affordable rates, older consumers can also find affordable coverage. A local agent or online comparison shopping sites like Matrix Direct can provide quotes and help consumers of all ages find the best rates for comprehensive policies.
Is Annual Renewable Term Life Affordable?
Like level term life, a renewable policy provides coverage for a set number of years. Unlike a level term policy, the renewable policies include an annual premium increase based on the consumer’s age. For families on a budget, renewable term life provides the best value in the early years of the policy. As their income increases, they can afford the renewable term life policy’s increase.
Is Permanent Insurance a Good Investment?
Universal and Whole Life offers additional choices to families. While these policies cost more to purchase than term policies, they grow in cash value. Likewise, they provide coverage for the duration of a consumer’s life, despite health conditions that may develop later in life.
Where can Consumers Find Free Insurance?
Parents or legal guardians with a dependent child under the age of 18 may qualify for MassMutual’s LifeBridge Program. The company provides a free 10-year term life policy worth $50,000. If the parent dies during the term, the policy pays for the child’s education.
How does Group Life Insurance Work?
Employers, financial institutions and civic clubs often offer a group policy. With minimal coverage, this option provides invaluable assistance to families and is more affordable than individual policies.
How Much Coverage does a Consumer Need?
A family’s needs and budget determine the answer to this question. Ideally, consumers should purchase a policy that provides five years of income in addition to dependent care and final expenses. In some cases, combining permanent and term policies allows families to manage the premium expense while providing financial security for the future.
How does a Policy Benefit a Family?
Sure, buying a policy is costly, especially for families on a limited budget. Consumers, however, must consider how much their families will suffer after the primary breadwinner or caregiver passes away. Paying a mortgage, childcare, educational fees and other expenses will strain the surviving family members. Financially, purchasing coverage is a wise investment for the entire family.
Instead of waiting until the budget supports premium payments for a policy, families should contact an agent as soon as possible to prepare for the future and rest assured that your spouse and children will be taken care of in the event of a tragedy.