1. Protecting Your Mortgage.  One reason to buy life insurance is to protect the investment of your home, or your home mortgage.  If you own a home, but are still making payments to the mortgage company, who makes those payments when you die?  Furthermore, who takes on the bills of the home when you die?  Many people have begun to acquire a term life insurance policy that coincides with the amount of years on their mortgage.  For instance, if you sign on for a 30 year mortgage in the amount $200,000, why not take out a 30 year term policy with a face amount of $200,000?  This insures that if you die during the span of your mortgage, $200,000 will be paid to your beneficiary (spouse, relative, etc.).  This will allow your beneficiary to pay off the mortgage and own the home free and clear, becoming an asset for the loved ones you leave behind, and not an inconvenience.

2. Protecting Your Family.  Another reason to buy life insurance is to protect your family.  This is probably the most obvious, or best known reason to buy life insurance.  Typically, we see many customers asking for quotes on life insurance after a marriage, or after the birth of a child.  Usually, the main breadwinner of the household will call in to request quotes on him or her self to protect their family in the unfortunate case of their death.  Many times, we will see people take out a 15 year, or 20 year term policy after the birth of a child.  This insures that if anything happens to the breadwinner while the child is growing up (until age 15 or age 20), the life insurance policy will be able to help the remaining family members pay for the expenses associated with raising kids and possibly even leave money for college as well.

3. Home and Auto Discounts.  Many people buy life insurance for the simple fact of getting a discount on their home and auto insurance premiums.  Many companies will provide a discount on the home and auto insurance if you buy a life insurance policy with the same company.  For instance, Erie Insurance, who we’ve proudly represented for nearly 30 years, will give about a 5% discount on home and auto premiums in the event that you also buy a life policy.  In some cases, the discount can nearly pay for the life policy itself!  There are many cases, depending on how much you pay on your home and auto insurance, where the life insurance policy is basically free after the discount.  In these cases, there really is no reason not to have the life policy, even if it’s as small as a 10 year term.

4. Retirement Income.  Using life insurance as a retirement plan, or an investment piece, is becoming more and more popular among clients these days, especially our younger clients.  Buying a whole life policy (one that lasts forever, and builds cash value), is becoming an increasingly popular option for life insurance customers.  The younger generation is starting to see (due mostly to problems with the social security system) that planning for retirement is something that needs to be taken very seriously and planned for early.  Now more than ever, along with traditional IRA’s and Roth IRA’s, people are turning to whole life.  Now, they can have a life insurance policy in place their entire life, that builds cash value consistently.  This way, as they approach retirement, they can withdraw this cash value or borrow against their policy, and use the cash as retirement income.  What happens when you take money out of your life policy, is that it lowers the death benefit.  For instance, if you have a million dollar whole life policy that you buy and contribute to from an early age, and you decide to withdraw 200K worth of cash value at age 65, then the death benefit on the policy will fall to 800K when you pass away.  These policies gain interest over time and will continue to grow in popularity among the younger generation.