Focus on Life

A guide to considering life insurance.

If you have people who depend on you for financial support, helping to secure their well-being with a life insurance policy just makes sense. If something happens to you, life insurance can help your family:

  • Replace your income.
  • Pay for final expenses.
  • Cover education costs.
  • Pay off major debts.

Take a look at life insurance and the ways it can help offer financial protection for your loved ones.

What Does Life Insurance Cover?
Quite simply, life insurance provides financial support to your family upon your death. It can help replace your income and pay for things like funeral costs, outstanding debts such as a mortgage and education costs.

In most cases, a life insurance policy’s death benefit is not subject to federal income taxes, so your family will receive the policy proceeds income tax free.

  • Income replacement. A life insurance policy provides a pool of money your loved ones can use to replace lost income. Your insurance professional can help you calculate how much money your family would need to maintain their standard of living.

  • Final expenses. These include funeral and burial costs as well as final legal and medical bills. Costs for a traditional funeral could be more than $10,000.1
  • Mortgage and other outstanding debts. Life insurance can give loved ones a way to pay off debts such as a mortgage, credit cards and car loans.
  • College expenses. In 2008–2009, the average annual cost for undergraduate tuition, fees and room and board was $12,283 for a public institution and $31,233 for a private college.2 Life insurance can help cover these costs.

What Else Can Life Insurance Help With?
In addition to the financial support it offers, life insurance can also give you and your loved ones other important benefits.

  • The right life insurance coverage allows loved ones to mourn and adjust after an unexpected death rather than immediately having to worry about financial concerns.
  • It can give you a sense of responsibility and greater peace of mind—by putting life insurance in place, you’ll know that your family will have financial resources at their disposal even if something unexpected happens to you. Keep in mind that all guarantees of the insurance policy are subject to the claims-paying ability of the issuing insurance company.
  • You’ll have a sense of pride knowing that your wishes and goals for your loved ones—college, weddings, staying in the home they love—can still be fulfilled.

How Much Life Insurance Do I Need?
Since everyone’s lives and financial circumstances are different, there is no simple, all-purpose formula for figuring out how much life insurance you need. The most accurate way to evaluate your need is to meet with a life insurance professional to do a thorough analysis of your finances and responsibilities. Many insurance professionals offer this service free of charge and with no obligation to buy anything.

A life insurance professional will help you evaluate your options and offer recommendations. This meeting is also an excellent time to ask questions and make sure you are comfortable with the policy, especially the amount of coverage and premium costs.

Please note that neither Nationwide® nor its representatives provide legal, financial or tax advice. The information in this piece is for educational purposes only.

Be sure to choose a life insurance policy that meets your long-term life insurance needs. If your personal situation changes—for example, you get married, have a child or get a job promotion—make sure your policy continues to meet your needs. You should also weigh the costs before making a purchase. Life insurance has fees and charges associated with it, including costs that vary based on sex, health, age and smoking status. Also, riders that customize a policy to fit your individual needs usually carry additional charges.

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