We don’t like to think about leaving loved ones behind, or the potential financial effect of your death on loved ones. Would your loved ones be able to remain in their home in Palo Alto, if you were no longer here? Would it affect college plans for your children? Life Insurance is a hotly debated issue in the insurance world, and it should be a decision you consider carefully. Here we explain a little about one form of life insurance: term life insurance.
Life Insurance Palo Alto – Term Life
Term Life insurance protects the people you love from financial difficulties in the event of your death. It is typically the least expensive form of life insurance available in Palo Alto, as well as nationally.
Term Life insurance has a predetermined benefit amount (anywhere between 50,000 and 5 million dollars) and is coverage that you purchase for a specific term ( 5, 10, 15, 20, or 30 years). If you die while the policy is in effect, your beneficiary receives the full amount of the benefit, typically tax free.
Term Life Insurance is indemnity insurance, which means that if you suffer a loss (in this case, the death of the policyholder) the beneficiary will receive compensation at the amount that the policy is worth. As “pure” insurance, it has no cash value, nor can you borrow against it.
Life Insurance Palo Alto – Why Term Life Insurance?
Term life insurance enables people to plan for personal and business needs at a low cost.
Term Life Insurance:
- Protects loved ones from financial disaster in the event of a death.
- Helps pay the mortgage so that your family can remain in their Palo Alto home.
- Finances education of loved ones
- Helps pay for other financial obligations (e.g. health care, support for aging loved ones, child care…)
- Helps preserve a family business
- Gives peace of mind
Life Insurance Palo Alto – Premiums
Term Life insurance premiums are calculated based on your age, your health, as well as the length of the policy term at the time you purchase the insurance. You can also renew your policy at the end of the policy term, typically at a higher price (because you are now older).
Life Insurance Palo Alto – How Much Does Your Family Need?
When determining how much insurance your family needs, it’s important to consider all the current financial obligations that you wish to provide for, and whether there will be future expenses. Often life insurance benefits are used to pay for debt reduction, debt elimination, or even to help with funeral expenses. Or the benefit is used to pay the mortgage, so that loved ones are not forced to move from the Palo Alto family home.
I like to remind people that when a parent dies, it may be a good idea to have enough coverage in place so that the remaining parent can quit work or reduce hours to focus on the children, so that the children are not forced to lose both parents- one to death, and the other to over-work.
Life Insurance Palo Alto – Is It Right for You?
Life insurance is a controversial topic among insurance professionals. I believe that it is wrong for any agent to try to push coverage on you. Ultimately, life insurance is a decision that you need to make for yourself, after a careful analysis of your needs.
I’m a former Police Sergeant with a Bay Area Police agency. I’ve seen how tragedy hits families unexpectedly. I know how helpful it would have been for them to have planed for the people they left behind.