Minnesota Benefits September Newsletter
September is Life Insurance Month!
September is national life insurance month, an educational initiative to bring awareness to life insurance and provide resources to those looking to learn more. So, who really needs life insurance? It is a common misconception that life insurance is only for those who have dependents. In actuality, life insurance not only covers dependents, but can also be used for burial costs, estate taxes, and help pay off debts you may leave behind. It is never easy losing a loved one, but Life Insurance can insure your loved ones are covered should you die.
Below, we answer common questions regarding life insurance that may help you make a more informed decision should you be considering purchasing.
What is Term Life Insurance?
Much like your health insurance you pay a premium, however the return on life insurance is a bit different. In the event you pass the insurer guarantees to pay your beneficiary a lump sum of money if you die while the policy is in effect.
What does Life Insurance cover?
Life insurance can be used to cover a variety of common expenses, like:
- Co-signed debt including student loans
- Mortgages
- College expenses for the kids
- Living expenses for your family
- Stay-at-home labor expenses (cooking, cleaning, etc.)
- Burial expenses
- Estate taxes that your heirs must pay for other assets
How much Life Insurance do I need?
The amount of life insurance you need will vary from person to person and depends on your financial circumstances. The goal when selecting is having enough to replace your income to cover your dependents’ expenses current and future. A general rule is selecting a policy that provides 10-15 times your income.
When should I buy Life Insurance?
Generally, during major life changes is a good time to reassess whether you should purchase for the first time, or purchase more. Events such as:
- When you get married
- When you start a family
- When you buy a house
- When you start up a business
- If you accumulate personal debt
Are term Life Insurance policies being issued during the pandemic?
Yes. Life insurance companies are still issuing life insurance policies for most healthy people and treating the COVID-19 outbreak the same way we would treat any other illness or travel advisory.
Does Life Insurance cover deaths from the pandemic?
Yes, life insurance will pay a claim for coronavirus-related death in almost all cases. Keep in mind that there may be exceptions, especially if false information is provided on the application about foreign travel or a COVID-19 diagnosis.
Have term Life Insurance costs changed due to the pandemic?
COVID-19 has not had an impact on life expectancies or the cost of term life insurance. Your premium is based on you. Your age, health, sex, and the amount and duration of coverage are what determines how much you will pay. Once your term life insurance policy is purchased, the premiums are locked in for the duration of the policy and cannot change.
If you already have a Term Life plan with the Minnesota Benefits Association, know you’re in good hands. If you are looking to get coverage learn more below.
