Life insurance can be a crucial part of financial planning and may provide a critical financial safety net for your loved ones in the event of your passing. Appropriate coverage can ensure that your family’s financial needs are taken care of, even following the death of an income provider. At the McCallum Agency, we have the knowledge and experience to help you understand the importance of life insurance and the various details of coverage options.

Why People Buy Life Insurance

Life insurance policies are one of the most commonly purchased types of insurance products on the market. They may prove to be valuable investments for several reasons, such as the following:

• Financial security—One of the primary reasons people buy life insurance is often to provide financial security for their dependents. In the event of an insured’s death, the insurance company can pay a death benefit to a policy’s beneficiaries, which can be used to pay for funeral costs, cover outstanding expenses (e.g., medical costs and taxes) or fund future needs, such as childcare and higher education.
• Debt management—Life insurance can cover outstanding debts left behind by the deceased, such as mortgages, car loans or credit card debts, preventing these burdens from falling on family members.
• Peace of mind—Knowing that your loved ones will be financially secure in your absence can provide invaluable peace of mind. The right policy may make all the difference in ensuring that your family can maintain their standard of living, even if you’re no longer there to provide for them.

What Is the Difference Between Group Life Insurance and Individual Life Insurance?

Life insurance can come in several forms and may be purchased through various arrangements. When determining the right approach to this crucial investment, consider the following options:

• Group life insurance—Employers typically offer this type of coverage as part of a comprehensive employee benefits package. The coverage amount may often be determined as a multiple of the employee’s salary. The employer usually pays the premium; all employees are covered under one policy. However, coverage typically ends when employment status ends, meaning alternative arrangements may be advisable.
• Individual life insurance—This is a policy a person can buy directly from an insurance company. The individual owns the policy, pays the premiums and chooses the coverage amount. This approach to life insurance can stay with an individual regardless of changes in employment.

Multiple options may be available among group and individual life insurance. Options may fall under the categories of term life (i.e., coverage for a certain number of years) or permanent life (i.e., coverage for a lifetime). Your insurance agent can help explain these and other forms of life insurance that may be available.

We’re Here to Help

Contact the dedicated team at the McCallum Agency today to learn more about your life insurance options and ensure you and your family are adequately covered.