Life Insurance As It Pertains To Family Protection

Family protection is what comes to mind when people think about buying life insurance. The fact is if there were no wives and children there would be no life insurance. Family, more often or not, is what it is all about. The before tax income of a “middle income” family, in the united states, today is about $68,000, and the average income of a two parent family is approximately $102,000. It also estimated that it costs over $260,000 to raise one child in this country.

Over and above these costs is the cost of a college education for a child. What of basic living expenses of the family, home improvement costs, saving in a good retirement plan, the cost of vacations and the cost of maintaining a good automobile or two. These costs can add up to a considerable portion of your income. The important thing to bear in mind is that these expenses remain even after the death or disability of the breadwinner. Family protection life insurance as well as disability insurance is therefore a must for all families.

Let us examine the types of life insurance you can use to take care of your family protection needs.

• Whole Life, Universal Life And Variable Life Insurance PoliciesWhole life and other permanent life insurance policies such as universal life insurance and variable life insurance are used by many to take care of their family protection needs. These policies provide death benefits that would provide lump sums or monthly incomes to the families of the bread winners. One of the incentives to use permanent life insurance is the cash value that a permanent policy provides. This cash value can be used, for example, to pay college costs or even to assist with retirement income. The premiums for these policies are much higher than those of term life insurance policies.
• Term Life Insurance In All It’s FormsMore often than not people buy term life insurance to cover their family protection needs. The reason they choose term is that term life insurance costs less than permanent life insurance and as a result they can buy more death benefit. The policy bought more often than not is the 20 year term life insurance policy. It is fairly inexpensive, thus provides ample death benefit. Term life policies have no cash value. People who buy term policies have a tendency to invest in mutual funds, money market plans, and may be 401k plans with their retirement needs in mind.Whatever family protection plan you invest in it is imperative that you give serious consideration to the purchase of life insurance as well as disability insurance. Think about it; what would happen if the income of the breadwinner is no longer there. Yours may be a family situation where both parents work but, if one income earner died suddenly, would there not be some hardship likely to befall the survivor ? After all, the expenses still continue on won’t they?Estate Taxes have been repealed but not completely as yet so, if you are wealthy, you could lose up to 40% of the value of your estate to taxes. A good Life insurance policy could pay those taxes for you, thus leaving your estate in tact.