MOULTRIE, Ga. — Life insurance is a topic clouded with misinformation around how much you need, what it will cover, and what it will cost.
One of the most common misconceptions is life insurance is for you.
While you may be the one paying the premium, life insurance is for your loved ones, and can protect them long after you’re gone.
A 2021 Insurance Barometer Study reported by Life Happens and LIMRA show that 42% of families would face financial hardship within six months, and a quarter would suffer financially within a month if one of the wage earners dies in a dual income family.
Working in agriculture puts our farm clients in a dangerous line of work that can really turn a family upside down if something happens to their farm operator. Let’s take a look at some numbers:
- The agricultural sector is still the most dangerous in America with 354 fatalities, which equals 28.24 deaths per 100,000 workers, according to 2021 data from the U.S. Bureau of Labor Statistics.
- According to 2021 data from the USDA, the total farm household income was estimated to be $82,315.
- The same USDA data shows the median farm net worth to the operator’s household is just over two million dollars.
With those numbers in mind, why wouldn’t a farm family invest in life insurance?
What are some other life insurance “myths?” Let’s break them down:
Myth #1: I’m young, or maybe I don’t have a large family. I don’t need life insurance.
Whether you’re married or not, you may leave behind family and friends when you pass away. If you have any debt such as farm equipment, student loans, car loans, a mortgage, etc.; someone may be responsible for that debt, potentially your spouse or other family members. A life insurance policy can help cover your final expenses and take care of outstanding debts, especially if your family needs to keep the farm for future income.
Myth #2: The life insurance policy I have through my full-time employer (if working outside of farming) provides enough benefit.
Life insurance policies issued by employers are generally a great benefit, but are not always enough to protect your family should you pass away. Many companies will offer 1 – 3 times an employee’s base salary, but that may not be enough to pay for final expenses, outstanding debts, your mortgage and the loss of future income for your family.
Employer policies are also not guaranteed. If a company goes through hard financial times, the life insurance benefit could be taken away. Also, if you leave the company, you typically can’t take that benefit with you to your next job.
Talking with a professional can help you to fill in the gaps that leave your family vulnerable.
Myth #3 – Life insurance is too expensive.
The truth is, life insurance will never be as affordable as it is today. Rates are generally lower when you are younger and in better health, so don’t wait to find a policy.
Certain types of life insurance provide living benefits in addition to a death benefit. These policies may provide cash value that can be borrowed from*, and the money in a life insurance policy will generally grow tax-deferred.
At COUNTRY, we’ve streamlined our life insurance process for eligible policies up to $500,000. If you qualify, you’ll be able to skip the medical testing that’s usually required.
Simplified Life Insurance
- Under the age of 50
- Applying for term or whole life options
- Looking for a $100,000 policy (or less)
- A quick underwriting and approval time of only 2-3 days to begin protecting you or your family.
Accelerated Life Insurance
- Under the age of 50
- Applying for certain term life, whole life and universal life options
- Looking for a $500,000 policy (or less)
- If you’re eligible, you may be able to bypass a physical exam.
- That means a fast approval for essential life insurance protection.
Types of Life Insurance
The three most popular types of life insurance are term, whole and universal. Term life provides protection for a specified period of time (like 10, 20 or 30 years) and is typically very affordable when you’re younger.
Whole life and universal life policies provide permanent coverage as long as premiums are paid. They typically have higher premiums than term life but also build cash value that can help with things like providing emergency funds or an estate for your family later in life.
Term Vs. Whole Life
“An easy way to think about term vs whole life insurance coverage is comparing them to the idea of renting or owning a home, where term life insurance would be ‘renting’ and whole life insurance would be ‘owning.’ ”
Term Life Insurance
- Good for a specific period of time, such as 10, 20 or 30 years
- Premiums are generally lower than those for whole life insurance
- Ideal for those wanting protection for a certain amount of time
- What you pay for the policy won’t go up for that specified term, although the longer the term, the higher the cost
Whole Life Insurance
- Remains in effect your entire life as long as you pay the premiums and don’t surrender or cancel it
- Lifelong protection as long as you pay your premiums
- You can accumulate a cash value
- Most often, the cost or premiums of the policy is guaranteed for life – so it won’t change
How much life insurance do I need?
“This will depend a lot on your specific circumstances. In general, though, you may want to buy enough insurance to cover your family’s financial needs, like the mortgage, any outstanding debts, education costs and final expenses if something happens to you.”
Protecting Your Mortgage – 2018 Life Insurance Campaign Messaging
Make sure your children can grow up in their family home, even if you can’t be there with them. Life insurance benefits can be used to cover the mortgage.
Editors Note: written by Bart Hester is a COUNTRY Financial Representative based in Moultrie, Georgia Bart.Hester@countryfinancial.com To learn more about types of life insurance and which types may be right for you, visit www.countryfinancial.com/life.
–Bart Hester, COUNTRY Financial