4 Compelling Reasons to Have Life Insurance

Purchasing insurance policies is a process that is often rife with confusion. The buyer knows they need some form of the insurance, but they aren’t sure about the bells and whistles available to them. For example, when investing in car insurance, the purchaser knows he or she wants collision and comprehensive coverage—but what about roadside assistance?

When it comes to life insurance, the uncertainties increase. Does the purchaser want term or whole life? Does the individual even need life insurance? The questions can cause people to delay and put off investing in a life insurance policy altogether. While there are several factors that will determine what kind of life insurance policy will work best for the individual, there are several reasons why life insurance policies are vital.

  1. To pay off debts. Many individuals erroneously believe they don’t need life insurance if they aren’t married or don’t have children. However, debts don’t vanish upon an individual’s death. The remaining family will have to take care of the individual’s student loans, mortgages, car loans, etc. A life insurance policy would help cover those debts.
  2. To provide for loved ones. Most people invest in life insurance policies to help pay for funeral expenses and provide financial relief for the lost income. If the policyholder is the primary breadwinner, having a life insurance policy can help their spouse or children navigate the months following their passing without worrying about how they will pay the bills.
  3. Financial security for children. Similar to the last point, a life insurance policy can provide for the children’s future. For example, a policyholder may want to finance their children’s education, pay for weddings, or support their entrepreneurial efforts. Life insurance can ensure this is still possible in the event of the policyholder’s passing.
  4. To provide peace of mind. Many people would rather not dwell on their mortality, but not preparing for it can leave loved ones in a precarious position. Money can’t replace the individual, but it can allow the policyholder to know their family will be taken care of once they’re gone.

Life insurance, above all else, protects loved ones from financial uncertainty. It allows them to navigate the time after the policyholder’s passing without worrying about bills, debts, and other monetary concerns. To learn more about life insurance, contact the experts at The Reilly Company.

Are You Making These Life Insurance Mistakes?

There are many common misconceptions about life insurance, which isn’t surprising given that over half of consumers don’t understand how it works. Many people overlook life insurance because they believe in some common myths or because they don’t think it’s important for their current stage of life. However, not having life insurance when they need it most can devastate peoples’ finances. The following are common misconceptions about life insurance.

Employer-Provided Insurance is Sufficient

This misconception is wrong on two counts. First, employer-provided life insurance is usually equal to one to two times the employee’s annual salary. Sometimes, employers provide the option to buy up to six times the employee’s salary, but most people will need up to eight times their income to provide for dependents. Some experts suggest 10-12 times their income.

Second, even if employers offer sufficient coverage, they often sever coverage when the employee leaves the company. This means the employee has zero coverage when they are likely older and less healthy than when they first started working for the company. Some companies have the option to convert the coverage to an individual policy, but this will cost the employee more than if they had obtained a policy on their own in the first place.

Only the Breadwinner Needs Coverage

Many married couples think that only the person bringing in the majority of the money needs life insurance. For example, they may assume the stay-at-home parent doesn’t need coverage because they don’t bring in any income. However, they provide numerous services that would otherwise cost money such as providing childcare, picking kids up from school, transporting children to sports practice, etc. Not only that, but the working spouse would want to take time off work to help his or her household adjust to their loss.

The Young and Single Don’t Need Life Insurance

Many people believe that if they aren’t supporting anyone (i.e. a child, spouse, or aging family member), then they don’t need life insurance. However, this is flawed logic. When an individual passes, there are expenses associated with it. The individual’s family must pay for a funeral, burial, remaining medical expenses, etc. A life insurance policy will help cover those costs. Plus, investing in life insurance at a young age means locking in much lower premiums.

These are just some of the most common myths surrounding life insurance. Unless you have enough income and assets to cover your expenses in the event of your passing, you need life insurance. The Reilly Group can help answer any questions you may have. Contact us today to learn more.

Life Insurance Death Benefits Offer Business and Fiscal Security

Investing in life insurance provides financial security and peace of mind. However, not many people realize how versatile life insurance policies truly are. Most individuals believe life insurance provides income to the bereaved parties as the loved one who passed on can no longer contribute financially. This is true; however, death benefits, the amount of money paid out when an individual files a life insurance claim, can do much more.

VIP Insurance for Businesses

When a high-ranking executive at a company dies, this can put the business in a difficult situation. For example, replacing CEOs, CIOs, and COOs can take time and cost a company a significant amount of money in the interim. This can put the future of the company in jeopardy, especially if the death was sudden. This is why some businesses invest in “key man” insurance policies on vital employees. This is especially helpful if a company has multiple partners. This type of life insurance policy can cover the taxes associated with transferring ownership of the company to the remaining partners.

Paying Estate Taxes

Large estates usually mean a high amount of taxes. When an estate transfers to heirs, this can create financial headaches. Many assets, such as property, are not easily liquidated. Even so, the IRS taxes them. Heirs may not have the funds to pay the taxes, which can force them to sell treasured heirlooms to cover the expense. It can also create infighting among family members. If one heir can afford the taxes but another cannot, a dispute over whether to sell the property or not is likely to arise. Death benefits can provide the necessary funds to pay the taxes.

The scope of life insurance has evolved over the years. People use life insurance to pay for their children’s education, as a means to optimize their taxes, and more. While the original purpose of life insurance was to provide financial security after the death of the insured, individuals cannot afford to ignore the possibilities death benefits offer. The Reilly Group can help you navigate the different types of life insurance policies available as well as determine which policy will provide the greatest benefits. Contact us today to learn more.

Three Types of Insurance Business Owners May Not Know They Need

Starting a new business is an exciting prospect, but it also requires a lot of hard work. Entrepreneurs have to focus on several elements all at once such as their products, their customers, their insurance, and their bottom line. However, failing to invest in the right kind of business insurance can lead to financial ruin. While most entrepreneurs are familiar with the major forms of business insurance (i.e. general liability, property, etc.), not all businesses conform to traditional coverage needs. Below are examples of three types of business insurance coverage small business owners may not realize is vital to their continued success.

Home Business Insurance

Many individuals operating their business out of their home may assume their homeowner’s insurance covers them in the event of theft or damage related to their home business. Unfortunately, this is not the case. Some homeowner’s policies allow add-on coverage to protect some elements of a home business, but the best solution is to invest in home business insurance coverage. This type of policy covers liability, theft, loss of business equipment, and more.

Business Life Insurance

Many businesses cannot withstand the loss of their leader. This is especially true for small businesses since one individual may perform several major jobs. For example, the COO may also be the primary hiring administrator as well as head of marketing. A company would find it difficult to replace such an individual. Moreover, the time spent finding and training new employees to fill those jobs puts a financial strain on the company. If such an individual were to die without warning, the business itself could collapse. In the event of such an unfortunate incident, business life insurance helps companies stay afloat while they replace the individual.

Cyber Insurance

Almost every company does some business via the internet. While having a presence on the web is often good for business, it also represents a liability. If a business collects credit card information or personal data about its customers, it needs cyber liability insurance. Cyber liability insurance also provides coverage in the event of cyber attacks designed to disable internal networks. On average, cyber attacks cost small businesses $9000 per incident. As a result, companies who fail to invest in cyber insurance can experience financial instability or even bankruptcy.

Neglecting to invest in insurance specific to your business is an unnecessary risk. The Reilly Company can help your business identify risks unique to your industry and suggest preemptive methods to protect against them. Contact us to learn more.

Long-Term Financial Planning with Life Insurance

Life insurance provides long-term financial planning options. Individuals buy life insurance to help relieve financial burdens on their family in the event of their death. It can help their family pay for funeral costs, debts the individual owed, and more. There are two main types of life insurance: term or whole life.

Term Life Insurance

Term life insurance is not permanent. Individuals purchase it for a set number of years ranging from 5 to 30. It only provides death benefits and payout only occurs if the individual dies during the term of the policy. These policies are popular because they often cost less money than whole life insurance policies. However, they become more expensive with age, especially after the individual turns 50. It is possible to convert term life insurance policies into whole life policies should the individual wish to do so.

Whole Life Insurance

Whole life insurance provides coverage for the duration of the individual’s life. It also provides a cash value payout in addition to death benefits. Individuals with whole life policies can borrow against the cash value as well. However, it can take over a decade for any meaningful cash value to accrue. While whole life policies have higher premiums initially, they can be less expensive over the individual’s lifetime. This is because the premium is fixed, whereas term life premiums increase as the individual ages and has to renew the policy.

Deciding Between Term and Whole Life

It is possible to own both types of policies. This situation often occurs when an individual already has a whole life policy but wants additional coverage for a set amount of time. Some individuals, however, may own a term policy but need a long-term solution for retirement or estate purposes. In this instance, they can convert their term policy into a whole life policy or purchase a separate whole life policy and allow their term policy to expire. To learn more about life insurance policies, contact The Reilly Company.