Why Every Family Needs Life Insurance

The Importance of Life Insurance

Life insurance is more than just a policy—it's a promise to your family that they'll be financially protected if something happens to you. It provides peace of mind, knowing your loved ones can maintain their lifestyle, pay off debts, and cover essential expenses even in your absence.

Life insurance supports a lifetime of financial needs and goals

20s & 30s

Protection for your family
Replace lost income

30s & 40s

Protection for your family
Replace lost income
Cash value for emergencies or opportunities

50s & 60s

Protection for your family
Replace lost income
Cash value for emergencies or opportunities

70 & Beyond

Protection for your family
Cash value for supplemental retirement income

When you’re in your 20s and 30s: Money may be tight. How would your family replace your income and pay the bills if you die? Buying life insurance is more about protecting your loved ones in your absence. The cost of insuring your life will never be lower, so it’s a good idea to start building cash value now. Paying more premium in these early years will improve your potential for cash value growth.

In your 30s and 40s: Your family could be larger — and you might have more obligations to protect. Unexpected events could hit your wallet.

In your 50s and 60s: You’re likely thinking more about retirement, and wondering if you’re putting enough money away. A little extra money in your life insurance policy can provide better protection and will continue to grow tax-deferred.

In your retirement: You can supplement your income with tax-advantaged access to cash value. You can take out all the money you put in — tax free — and borrow against the policy for even more money. This can lower your effective tax rate by easing the draw on your taxable retirement income sources. When you die, your life insurance death benefit goes to your beneficiaries income tax free, which they can use to cover living expenses and other debt.

Understanding Life's Risks

Life is unpredictable. While we hope for the best, planning for the unexpected is essential to protecting your family's financial security. Life insurance doesn't just protect against death—modern policies offer living benefits that provide financial support when you need it most.

Two Major Financial Risks Every Family Faces

1. Life Risk (Premature Death)

What happens if you die too soon? Your family loses your income, faces mounting debts, and struggles to maintain their quality of life. This is the traditional role of life insurance.

2. Health Risk (Critical, Chronic, or Terminal Illness)

What if you survive but face a serious health condition? Medical bills pile up, you may be unable to work, and your savings quickly deplete. This is where living benefits become invaluable.

Living Benefits: Protection While You're Still Alive

Traditional life insurance pays a death benefit when you pass away. But what if you need help before that? Living benefits (also called accelerated death benefits) allow you to access a portion of your death benefit early if you're diagnosed with a qualifying health condition.

Three Types of Living Benefits

Critical Illness

Life-threatening conditions that require immediate treatment:

Heart attack
Stroke
Cancer
Organ transplant
Kidney failure

Benefit: Typically 25-50% of death benefit available immediately upon diagnosis.

Chronic Illness

Long-term conditions requiring ongoing care:

Inability to perform 2+ activities of daily living (eating, bathing, dressing, etc.)
Alzheimer's or dementia
Severe cognitive impairment
Requires substantial supervision

Benefit: Monthly payments or lump sum to cover long-term care costs and living expenses.

Terminal Illness

Diagnosed with a condition expected to result in death within:

12-24 months (varies by policy)
Confirmed by a physician
No reasonable expectation of recovery

Benefit: Access up to 50-100% of death benefit to use for medical care, quality of life, or settling affairs.

Why Living Benefits Matter

Cover medical expenses not paid by health insurance (deductibles, copays, experimental treatments)
Replace lost income if you're unable to work during treatment or recovery
Maintain your lifestyle without depleting retirement savings or college funds
Provide peace of mind so you can focus on healing, not finances
Often included at no extra cost with many modern life insurance policies

Hypothetical Example

Consider Sarah, age 42, who is diagnosed with breast cancer. If her life insurance policy includes a critical illness rider, she could access $100,000 from her $500,000 death benefit to cover:

✓ Medical treatments not fully covered by insurance
✓ Lost income during 6 months of treatment
✓ Childcare while she recovers
✓ Experimental therapy that could save her life

If Sarah recovers fully, her family would never have touched their savings, and she would still have $400,000 in life insurance protection for the future.

Key Reasons Every Family Needs Life Insurance

Income Replacement: Helps replace lost income so your family can continue to meet daily living expenses.
Debt Protection: Pays off outstanding debts such as mortgages, car loans, or credit cards, so your family isn't burdened.
Education Funding: Ensures your children can pursue their education, even if you're not there to provide for them.
Final Expenses: Covers funeral and medical costs, relieving your family of financial stress during a difficult time.
Legacy & Security: Leaves a financial legacy and provides long-term security for your loved ones.
Living Benefits Protection: Access funds during critical, chronic, or terminal illness to cover medical costs and maintain your quality of life.

How Much Coverage Do You Need?

Every family's needs are unique. Consider your income, debts, future expenses, and goals when determining the right amount of coverage. A financial professional can help you assess your situation and choose the best policy for your family.

Take the Next Step

Don't wait until it's too late. Protect your family's future today by learning more about your life insurance options or speaking with a trusted advisor.

The Best Time to Get Life Insurance

The best time to secure life insurance with living benefits is before you need it. Once you're diagnosed with a serious condition, getting coverage becomes difficult or impossible. Protect yourself and your family today while you're healthy and rates are affordable.