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Life insurance can help your family and dependents cover important expenses, such as child care and mortgage payments, in your absence.

But even if you are convinced of the usefulness of this financial instrument, you may still feel confused about when to prioritize its purchase. Here are three signs you might want to consider taking a weekend or so to start shopping for a policy.

Whether it’s your spouse or young children, having people in your life who depend on your income is a sure sign that you need to consider life insurance.

“It serves many purposes, but it’s traditional if someone else is really financially dependent on you,” says Eric Kirst, a certified financial planner at Savvy Wealth. Life insurance can help your family by providing money, called a death benefit, if you die while covered by a policy.

There are two distinct types of life insurance to consider in this scenario:

  • Life insurance Your coverage is for a period of time specified in the policy, generally between 10 and 30 years. After that term expires, there is no coverage, but this type of life insurance is generally more expensive than a permanent policy.
  • Permanent life insurance It remains in effect throughout your life and can accumulate cash value, which is an interest-earning amount that can be borrowed for future expenses.

One of the biggest differences between term and permanent life insurance is cost. “Temporary term insurance serves a temporary need, and it’s cost-effective,” says Kirste. Term policies are meant to cover temporary situations, like having young children or having a mortgage, for example. Permanent life insurance is more affordable and is for those who want to leave an inheritance for children or build up cash value in the policy for use later in life.

Although finding the right life insurance plan can be challenging, we’ve done some of the hard work for you. CNBC Select has rounded up the best life insurance companies and selected several that stand out from the competition. Some of our top picks include State Farm for its outstanding record in customer satisfaction. Guardian also ranked highly for term life insurance among the many reviews we reviewed.

State farm life insurance

  • it costs

    The best way to estimate your costs is to request a quote

  • The application is available

  • Politics highlights

    State Farm offers a variety of long-term, whole, and comprehensive life insurance products to choose from, along with other types of insurance. It is highly rated for both financial stability and customer service.

Guardian life insurance

  • it costs

    The best way to estimate your costs is to request a quote

  • The application is available

  • Politics highlights

    Guardian offers a variety of policies, including term, total, and universal. It also offers term policies that can be converted into whole or all-inclusive life policies, along with strong financial strength ratings.

Your paycheck isn’t the only reason someone is counting on you. If you provide full-time care for a child (or anyone else), you should also consider life insurance even if you do not have an income.

“If something happens to this person who provides childcare, there are other things they will do around the house for the other partner,” says Kirste. “And there’s a dollar value to that.”

Taking out life insurance as a stay-at-home parent can help cover your family’s expenses if you are no longer around. According to caregiving platform Care.com, the average cost of hiring a nanny is about $694 per week and can be greater in areas with a higher cost of living. The right life insurance policy can help your partner and family maintain their standard of living if necessary.

One of the common reasons for obtaining life insurance is to take out a mortgage. If you bought your home with a partner, you will need to make sure that he or she will be able to continue making your mortgage payments.

Experts recommend taking your mortgage into account when determining how much life insurance you need. While a death benefit of 10 times your annual income is a rule of thumb, your actual need may vary depending on your mortgage. Kirsty suggests considering both your mortgage debt and your future income potential when deciding how much life insurance to buy. “It’s a bigger number than religion itself,” he says.

If you have a mortgage or are buying a home, life insurance may help your partner or spouse continue to live there even if something happens to you.

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Life insurance is a way to make sure that your family or partner is financially protected in the event of your death. It is especially useful if you have significant debt such as a mortgage, or have people who depend on your income or work at home to live the good life.

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Editorial note: The opinions, analyses, reviews or recommendations expressed in this article are those of the editorial staff alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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