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Alternatives to Life Insurance
Having options is important. Maybe you think that traditional life insurance policies won’t work for you, or maybe you fear declines and high premiums for coverage.
This is why we have compiled a list of some popular alternatives to life insurance. These alternatives, like life insurance, are not for everyone, so be sure to speak to a financial adviser or a life insurance agent before choosing the best option for you!
Why You Need Life Insurance
In order to figure out which alternatives are right for you, you need to first ask yourself why you need life insurance. Typically, an individual needs life insurance to financially protect family members in case he or she is no longer around to do so.
Life insurance can be used to help pay for your kid’s school or to pay off your mortgage, credit card and other loan debts. These debts don’t disappear in the event of your death, and you don’t want to leave your family members paying for them.
What to Do If You Cannot Get Life Insurance
We want to stress that, while it is rare that a client cannot find suitable coverage, sometimes it does happen. Occasionally, a client is deemed too high risk for carriers or simply wants to look into alternatives.
If you cannot obtain a life insurance policy, we advise you to speak to one of our agents first. Our agents’ expert knowledge of high risk clients – and which insurers cover high risk clients – means you don’t have to go unprotected, no matter your situation.
You can also talk to one of our trusted agents about which life insurance alternatives may be right for you.
Am I being realistic?
Sometimes coverage takes time, so you need to make sure you are being realistic and patient.
If you are a substandard rated smoker who is looking for a million-dollar life insurance policy, you may need to go back to the drawing board to find something more realistic for your situation.
Can I lower my risk to earn a better rating?
Being realistic doesn’t mean you have to give up on finding the perfect policy. In many cases, policyholders are able to lower their premiums by taking a few simple steps to improve their rating!
Exercise, eating a healthy balanced diet and ceasing the use of tobacco and nicotine products can all improve your rating! Once your rating improves, you will have a wider selection of coverage options and will be able to find a perfect policy!
How much coverage do I need?
If you’ve had a difficult time finding coverage, you may be looking for too-large a policy. You may think that over-estimating your future needs is your best bet; however, this is rarely the case.
Remember: the larger the policy, the more you pay for it. And if you are a high-risk client, insurers may balk at the idea of providing a million-dollar policy. Sit down with your agent and be honest about your debts and financial obligations.
That way, you can look for the proper policy size. For more information on how to determine how much life insurance you need, check out this article!
Have I exhausted all of my options?
Have you worked with an agent and looked into every coverage option possible? Remember: an agent is a valuable tool to have because he or she can help you compare all types of coverage.
Chances are, if you’re looking on your own, you don’t have the inside industry knowledge necessary to find the best carriers.
Options For Alternatives To Life Insurance
PrePay Your Final Expenses
You always have the option of taking care of your funeral arrangements before the time comes. Burial plots or cremation can all be planned in advance. Be warned: final expenses are not cheap. If you choose to go this route, you could be looking at prices averaging between $7,000 and $10,000.
Save:Open a tax-advantaged Roth IRA account or a 401(k) account to help you save for retirement. You can also open a regular savings account to help you plan for the future. While it is always a good idea to save your money, you never know what the future can bring, which may make it difficult to determine how much money to save for your loved ones.
Critical Illness Insurance
Critical Illness coverage is designed to pay a lump sum of money if the holder is diagnosed with a specific disease. These diseases are predetermined and written in the insurance policy. Typically, you may find that these policies aren’t worth their costs (which can amount to up to $300/month!) and you will still have to go through an underwriting process.
So, if you fear declines from a medically underwritten insurance policy as your main reason for seeking an alternative to life insurance, this type of coverage is not for you. Additionally, you may not even be able to use the coverage if you happen to have an illness not listed on the policy.
You could always invest your money in stocks or bonds, which will earn dividends that can help you save for the future. The upside? If the market is doing well, you could earn a lot of money. The downside is that you will be relying on a notoriously shaky market for your family’s financial future, and you could leave them unprotected. Be sure to speak to a trusted financial adviser before investing your assets!
We constantly stress that there is a life insurance policy available for everyone, no matter their risk; however, we know that – on the rare occasion – an individual may find themselves unable to qualify for insurance or may not find a policy right at this particular time.
Here to Help!
This is where an agent can help. We are not just here to sell your life insurance.
Our Gold Coast agents can help you compare life insurance policies with alternative options out there.