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In This Article I’m Going To Outline Nine Very Important Reasons Why Gay Couples Should Own Life Insurance
Most likely you are reading this article because you are a recently married couple and you understand the importance of having life insurance protection to cover either your spouse or children.
When an individual considers purchasing life insurance, a lot of questions tend to come up – questions I hope to answer in this article by exploring the reasons why life insurance is so important.
Here’s An Overview Of Today’s Topics:
- Nine Reasons Why Gay Couples Should Own Life Insurance
- What Kind Of Life Insurance Coverage Is Available For Gay Couples?
- Should I Have An Exam?
- Burial Insurance Rates, Age 40 to 90*
1. Your spouse will experience a financial loss when you die
The biggest reason why people buy life insurance is to protect against financial loss. It’s likely that you and your significant other have built a life with contributions from both of your incomes. Imagine for a moment how your partner would survive if your income was suddenly taken away.
It’s hard enough to lose someone that you love, but we often forget to think about the economic impact that a loss of a spouse can cause.
The loss of a spouse’s income is a problem that is long lasting and problematic. How will the mortgage be paid? What about any second homes that you may own? How will funds be put into a college savings fund or retirement without that income?
These are hard questions to ask, but important to consider, especially when thinking about life insurance.
2. You don’t want to lose your home
If you’re like most couples, after purchasing a house you make it your home. It’s a place where your family creates lasting memories and where you build a life together. It’s more than just four walls and a ceiling. Most likely you have a mortgage on your house. Imagine for a moment if you or your spouse were to pass away. Not only would your income be affected by that loss, it might also make it very difficult to continue to make mortgage payments.
It’s very likely that you’ll have difficulty keeping up with mortgage payments and may potentially have to sell the house at an undesirably lower price than you’d like. The solution to this problem is to purchase a mortgage protection life insurance program.
These kinds of plans help keep your partner in the home without the risk of them not being able to make payments. With this type of life insurance in place you can secure the home from being lost due to the death of a husband or wife.
Consider contacting us at Buy Life Insurance for Burial to help find a life insurance plan that will cover these kinds of obligations.
3. You or your spouse’s income supports your current lifestyle
As mentioned earlier, many married couples today, regardless of if they are gay or straight, both have to work to provide financial security for the family. Imagine for a moment how your family’s lifestyle would be affected if you or your spouse died.
A life insurance policy is a great opportunity to protect against economic loss. Here’s how it works. If your spouse dies, then you are named as the beneficiary and would receive the proceeds from the death benefit. What you do with that money is totally up to you.
A life insurance policy can be used by to pay down bills. You can continue to support the lifestyle that you’ve built together and provide for your retirement and children without worrying where the money will come from.
Whatever the beneficiary decides to do with the money, there’s no doubt a life insurance plan is a great way to sustain a lifestyle without the family experiencing dramatic change upon the death of a loved one.
4. Employer based life insurance is not enough
When I sit down with gay couples, sometimes they’ll ask me, “What about life insurance at work? Isn’t that enough?” My response is no, it isn’t enough. First off, when you retire, can you take your life insurance with you? Most likely the answer is no.
Many employer based life insurance plans are based on group life insurance coverage. You cannot take the policy with you and if you can, it tends to be a high multiple of what you were originally paying. Life insurance provided through an employer generally cancels at age 65 or 70.
Secondly, is your employer based life insurance providing enough coverage? Most likely the answer is again no. If you ask most financial planners, the rule of thumb to determine a good amount of coverage is to take your annual income and multiply it by 10. Coverage through an employer usually caps out at three times your income or five times your income.
The problem with a lower coverage amount is that it doesn’t cover all the financial needs often present not just immediately after you die, but for many years to come. Relying solely on employer insurance means your needs will not be fully met. For example you may be able to make mortgage payments, but only for a very short period of time, and all the money will go to those payments despite other financial needs.
My suggestion to ensure you have full coverage is not to drop your coverage from work, but to add a supplementary policy onto the policy you have.
You should also consider what would happen if you quit, retire, or become disabled? In many circumstances, you’ll find that if you become disabled or you quit your job you will lose your life insurance. Often human resources does a poor job of explaining these benefits to people who are nearing retirement.
Consider picking up a life insurance plan on an independent basis to ensure you have reliable coverage beyond what your employer provides.
6. You have children you want to take care of
If you have children with your spouse and you care for their welfare financially, it’s important to consider what expenses they might need funding for in order to maintain their current lifestyle.
Many parents have a college fund or hope to help their children get started in life with things like a down payment on a car or house. With the loss of your income, these types of savings are put at risk.
With proper life insurance coverage though you have peace of mind that the future needs of your children will be taken care of.
7. Burial and cremation costs are expensive
One main reason a lot of gay couples purchase life insurance is because they want to make sure that they’re covered for their burial or cremation. They may be close to retirement or at retirement and not have the kind of money available to take care of those expenses.
This is where a life insurance plan is handy as it can be designed to cover the expenses related to a burial or cremation.
You can get life insurance plans in smaller increments of $5,000 all the way up to $25,000, enough to pay for these kinds of expenses without having to spend a lot of money out of pocket.
8. You own some life insurance, but it’s not enough
Perhaps you and your spouse have some life insurance, but now that your needs have changed or your income has increased, you’ve also expanded your obligations. Picking up additional coverage is a good way to help cover the difference. So consider purchasing another life insurance plan to build out your life insurance program so that both of you are better covered.
9. Adding a safe money program to your retirement program
Life insurance is not just used for death benefit coverage. It can also be used for retirement planning.
Life insurance programs can offer what’s called a supplemental life insurance retirement plan that’s designed to supplement your current retirement program, but provides a way to generate retirement funds in a safer manner than the downfalls experienced with the stock market.
There’s programs available like index universal life plans that allow you to participate in the upside of the market without experiencing losses. While I wouldn’t necessarily recommend picking up an indexed universal life plan as your only source of retirement, it is a great option to add to your portfolio to accumulate great gains without some of the risks inherent in investing in the stock market.
What kind of life insurance coverage is available for gay couples?
There are many types of life insurance programs available to gay and straight couples alike. Ultimately, what you have to do is determine what kind of plan works best for you. Let’s quickly review what your options are.
Term life insurance
This is the most popular form of life insurance. It’s used to cover things such as income replacement, a retirement planning income replacement, and supplementing employer based life insurance. It’s the cheapest form of life insurance and it’s only designed to last for a predetermined period of time, typically between 10, 20, and 30 years.
Most people purchase term insurance because it allows for the most coverage for the least amount of money. You do have the option of taking an exam or doing a non-medical exam. More on that later.
Term Life Insurance Coverage – 10 Year Term – $100,000 in Coverage
Term Life Insurance Coverage – 10 year Term – $250,000 in Coverage
Term Life Insurance Coverage – 10 year Term – $500,000 in Coverage
Term Life Insurance Coverage – 10 year Term – $1,000,000 in Coverage
Permanent life insurance
Permanent life insurance is designed to provide permanent protection. It doesn’t cancel due to age or health. Most people buy this type of insurance when they need to protect against burial expenses or financial obligations that are permanent.
$150,000 Whole Life Insurance, Life Pay
$250,000 Whole Life Insurance, Life Pay
Should I have an exam?
When I sit down with many gay couples to discuss life insurance options they often ask me whether or not they should consider taking an exam. My advice is as long as your health is in pretty good shape, it’s worthwhile to take an exam, reason being you want your life insurance company to give you the best rates, right?
Well, in doing so, you have to submit yourself to an exam. That allows a life insurance company to determine your premium based on the most up-to-date information of where you stand healthwise and give you a rating based on that.
If you’re not in great shape, an exam may not be a good idea. But if you’re in really good shape, you could potentially get a price point that could be reduced by up to 50 percent or more than the premium you would pay with a non-medical application.
It’s important to note, a non-medical application does not require an exam but does rely on past medical records to determine a premium.