5 common questions about life insurance
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Starting a family is one of the most exciting times in your life. It’s also when you’ll first realize that you’re no longer just looking out for yourself. This can feel overwhelming, but it really shouldn’t be. You probably have questions, and that’s a good thing. Here are some common ones to get the conversation started:
1. Do I really need life insurance?
Life insurance is not a requirement. However, starting a family is a common time for people to purchase a life insurance policy, and for good reason: At its simplest, it’s a way to help make sure your family can meet their financial needs if the unthinkable happens.
2. Don’t I get it through my job?
Many people do, although often the policies you get through your employer may only cover the basic expenses 1 that come with someone passing away. And considering that, according to CNN 2, the new normal is to switch jobs four times by the time you’re 32, you may want to look into how changing jobs will affect such a policy.
3. What’s term life insurance?
The two main types of policies are term and permanent life. As its name implies, term lasts for a set term (typically from 10 to 30 years). You pay a set premium for the life of the coverage. If you continue to need life insurance coverage, many carriers offer an option to convert to a permanent policy. Term life premiums are typically more affordable than permanent life.
4. Okay, then what is permanent life insurance?
Think of permanent as a long-term investment, a policy that protects your family for your entire life. Within this category of permanent insurance, there are many products you may have heard of before, including whole life, universal life, and variable universal life. Though more expensive, permanent life policies build cash value as you continue to pay your premiums, in addition to securing lifetime death benefit protection. They may also offer riders for long-term care coverage and are flexible based on changing needs.3
5. How much coverage should I get?
First, it’s important to get a sense of your family’s financial needs. To get a quick sense of how much coverage you may want to consider for protecting your family’s future, click here.4
This article is not an endorsement of any particular product, service or organization; nor is it intended to provide financial, tax or legal advice. It is intended to promote awareness and is for educational purposes only.
Citations:
1 FeeHacks Blog: “Do Millennials Need Life Insurance?” by Kali Hawlk, September 9 2014
2 CNN Business: “The new normal: 4 job changes by the time you're 32” by Heather Long, April 12, 2016 https://money.cnn.com/2016/04/12/news/economy/millennials-change-jobs-frequently/
3 John Hancock Insurance: “Life insurance at a glance” https://www.johnhancockinsurance.com/content/jncw/en/life-insurance/life-insurance-at-a-glance.html
4 John Hancock: “Life Insurance: What’s your number?” May 5, 2020 https://www.johnhancock.com/ideas-insights/how-much-life-insurance-do-you-need.html
Calculator Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02210 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595.