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Get the Facts on Life Insurance

Posted November 21, 2012 in Advice Column, Boone

Think about this: The annual cost of a 20-year, $250,000, level term life policy for a healthy 30-year-old consumer is roughly $150 a year, but according to a new LIFE Foundation study Americans estimate the cost at $400.

Don’t let common misconceptions about life insurance keep you from securing adequate coverage. The truth is that regardless of your stage in life, you likely have a need for life insurance.

•    Just starting out. Whether single or married, if you have debt from college or a mortgage, life insurance can ensure you don’t pass on that burden. Life insurance benefits can eliminate the worry about paying final expenses, or keeping the mortgage or other debt payments current.

•    Affordable family protection. When children are part of your family, life insurance becomes even more important. The right life insurance policy can ensure your children will be provided for from the time they are small through college age or their lifetime, depending on the policy.

•    Single doesn’t mean alone. For single parents, life insurance can be even more important than for two-parent households. Some singles may provide care for aging parents or other family members. With adequate life insurance, you can help ensure your loved ones’ care and medical costs are covered, should something happen to you.

•    Empty nest offers room to grow. Your kids may be out of the house, but you likely still need life insurance to replace lost income now and in retirement if the unthinkable happens. Plus, while the house is “empty,” you may still wish to help your kids with college or pay for a wedding.

•    Grandchildren and college funding. Life insurance can be earmarked for each grandchild to help pay for college or as a down payment on a first home. Another option is to purchase individual life insurance policies for your grandchildren, which could also help with college expenses and put them in a better position to get life insurance later on.

•    Charitable giving. Life insurance can fund a charitable gift. You can honor and support a cause or organization by using life insurance to leave a significant contribution. When structured properly, this strategy may also have tax advantages.

•    Financial safety net. Did you know that some pension plans cease paying upon your death? And for retired couples who are both receiving Social Security benefits, the lower of the two payments will end following the death of a spouse. You can count on life insurance to replace these sources of income and allow your spouse to continue the retirement lifestyle you planned.

As your circumstances change, it’s a good idea to ask your agent how different types of life insurance can create an affordable plan that protects you and your family.

Information from, provided by Lora Ahrens Olerich, Farm Bureau Financial Services, 1329 S.E. Marshall St, Boone, 515-433-2000.

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