How would you pay for your children’s education if you suffer from a severe illness?
Life insurance is a need that we all have but are unaware of. Life insurance allows you to guarantee the security and economic stability of your family if you suffer a severe illness, and contrary to what many think, acquiring it is simple as long as you have the advice of professionals.
If you want to know how life insurance works and whether the benefits are adequate to ensure your children’s education if you must stop working due to a severe illness, don’t worry; here, we will explain it.
How does life insurance work?
It is a savings fund that can be used by the beneficiaries enrolled in the policy in case of illness or death of the insured. Its operation is simple. It begins with:
Before signing a contract, you should talk to your advisor so that he can tell you the requirements to apply. Once the application is approved and you appear as the owner, you must choose the beneficiaries.
When the contract is signed, an initial payment will cost the same as the following monthly installments. If, for example, the policy is worth 60 dollars, that is the value you must pay at the beginning to activate it and during the following months.
A clear example can be
Let’s say you work as a trucker for the last ten years of your life, and suddenly you develop cerebral palsy that prevents you from driving again and doing other daily activities like bathing and dressing. On the other hand, you have a daughter who will soon go to university, and since you can no longer work, you do not have enough income to pay for her studies. The fact of being disabled and not being able to carry out these daily activities makes you eligible for the savings generated in your life insurance to be disbursed for your daughter’s education.
Average Cost Of Life Insurance
The price range for life insurance can vary depending on your age, health condition, and what you seek in a policy. For example, if you are young and your health condition is optimal, you will find insurance much more affordable than if you are an older person and suffer from an illness. But, in general, the values can range from US$30 to US$300 or so.
What is life insurance for?
Traditionally we have believed that life insurance is valid only in the event of death. But the concept of life insurance as an amount of money we can leave to our relatives in case of death must be modified. Today, there are life insurances that pay during life. What does this mean? There are other scenarios, not precisely death, in which your family can count on financial protection if you suffer from a chronic, severe, or terminal illness.
You can use the savings generated in your life insurance:
- Pay for your children’s education: university costs and maintenance are high. Imagine that you are diagnosed with an illness that keeps you off from work which means no income. A life insurance policy will give you peace of mind, and your children’s education will be carried out.
- Paying your home mortgage: investing in a housing project is one of the most representative expenses you can have. Your home must also be protected to remain your family’s refuge the day you are gone. Do you already have a protection plan to cover mortgage expenses?
- Pay the bills month by month: if you are diagnosed with a serious, chronic, or terminal illness, you can continue covering basic expenses such as the bills that arrive each month, which is a great relief since you will not have to resort to loans that put your family assets at risk.
- Plan your retirement: the fact that your children are adults and your home is already insured does not mean you should do without insurance. Remember that the future is still being determined, and you cannot ensure that your savings cover 100% of your expenses. Life insurance allows you to generate additional income to complement your retirement plan.
How can I claim the money from the policy while I’m alive?
The amount of your life insurance policy can be claimed in the following cases:
Serious diseases: are those that pose a high risk to the health of the patient and require specific and urgent medical attention to contain them and do everything possible for the recovery of the person who suffers. Some of them are heart attack, Thrombosis, Stroke, Cancer, Leukemia, Organ Transplantation, Paralysis, carcinoma, Serious Burn, Dialysis, and chemotherapy. In these situations, you can request part of your fund to get the economical benefits while alive.
Chronic diseases: when you cannot do two of the six activities of daily living such as bathing, dressing, cleaning, moving, suffering from incontinence, and not being able to eat on your own for more than 90 days. Some of the most frequent cases are Asthma, Arthritis, Diabetes, Epilepsy, Hypertension, Parkinson’s, and Chronic Migraine, among others.
Terminally ill: A doctor indicates that the patient has less than 24 months to live. Up to 100% of the coverage can be delivered in these cases. Some of the most common terminal illnesses are, for example:
- Chronic kidney failure
- Advanced heart disease
- Untreatable neurological diseases such as most dementias (including Alzheimer’s)
- Advanced cancer
- Chronic pulmonary obstruction
What happens in case of death?
The money is delivered to the beneficiaries. Remember, insurance companies do not cover deaths caused by an overdose of psychoactive substances, nor in the event the insured ends their life voluntarily. However, life insurance covers death for any other reason in most situations, protecting beneficiaries under challenging times.
Types of life insurance
The life insurance portfolio is quite broad, so you must know its characteristics in detail to choose the one that best suits you and your family.
Term life insurance
It is an affordable policy. The money fund is paid out when the insured person is diagnosed with a qualifying illness or dies during the policy term.
The term of this insurance can be established between 10 and 30 years. Remember, if you desire, you can change your term life policy to a permanent one. To make the change, you only have to wait a minimum of one year with the term policy.
Permanent life insurance
It is a lifetime policy that, in addition to giving you savings within the monthly payment, also offers you the possibility of increasing the initial value set. Suppose you have the option of paying a higher price than that stipulated by the insurer and thus increasing savings to use it in the future. There is a maximum allowed to put that additional amount.
Money disbursement occurs when the insured suffers from one of the diseases mentioned at the beginning or dies during the policy term.
Main benefits of having life insurance
Having life insurance brings with it multiple benefits, not only for you but also for your family.
- Protect your family: in the event of loss or illness, your family will be able to continue to have the necessary income to cover expenses such as daily household bills, education costs, health, and family well-being.
- Protection of minors: children and young people can access particular policies at affordable prices. In addition, with permanent policies, they can have savings that will allow them to pay for their studies when they are of age.
- Benefits in life: you can use your money to cover urgent expenses such as illness or a financial crisis.
Can I apply for life insurance without defined immigration status?
To access life insurance, you can apply even if you do not have defined immigration status. However, you must have your current passport of origin, the ITIN number, a bank account in the United States, and declared taxes.
Additional services that you can include in the purchase of your policy
There are some extra benefits that you can request from your advisor when you purchase your life insurance.
Children term rider
You can include in your policy an additional payment in the event of the death of the insured child; it does not have to be a biological child; it can be a stepchild or adopted. The requirement is that they are at least 15 days old.
Children born or adopted after the policy purchase are also insured up to the age of 25 or until they marry.
A maximum of 3 children can be included per policy, each with an approximate value of 15 USD.
It exempts you from paying the monthly payment of your policy for up to two years if you become unemployed. You must have more than 90 days without work. The value of this policy is approximately 11 USD.
Before you say you don’t need life insurance, think about how helpful and reassuring it would be for your family to have this guarantee. Unfortunately, death is a reality, and illnesses and accidents can come when you least expect it, so life insurance should also be a fact in each person’s life.
Acquiring a tailor-made policy does not have to be complicated; remember the importance of carrying out your application process with experts in the insurance industry.