Life insurance pays your beneficiary when you die. There are several philosophies on how to buy life insurance, ranging from just cover the funeral to give the survivors a fortune upon your death. Whatever your personal belief is on how much coverage to buy, be sure to buy something immediately. Some financial advisors recommend buying ten to fifteen times your annual income. It seems to me that the least amount you should buy is enough to cover your funeral expenses and to hire an assistant innkeeper to take over the chores you leave behind so your partner isn’t burdened with yet another “hat” to wear.
I have known innkeepers who didn’t buy life insurance, and the survivor suffered more than just the loss of a life and business partner, they suffered financially as well. I have also known innkeepers who had life insurance when they became innkeepers, and then increased their coverage to protect their B&B investment. Fortunately few needed that protection as innkeepers, but those who did need it were glad they had it.
Start with getting life insurance quotes for term, universal, variable universal, and whole life insurance policies. Check not only with local life insurance companies but also with online life insurance companies. Not all life insurance policies are the same, getting a trusted professional to guide you through the subtle nuances of a quoted policy may save your survivors great heartache.
Just as policies differ, so do agents. Look for an agent who isn’t paid to sell you a product with built in commissions, and one who can offer you competitive products with lower loads and fees. Make it a must that your life insurance product not have a surrender charge.
Term life insurance is in effect during a specified time period, generally 10, 20, and 30 years. Term insurance may be a way to get cheap life insurance coverage, but cheap term life insurance doesn’t give you any additional benefits beyond death coverage. Term life insurance rates will stay the same during the contract period, but if it ends before you die, neither you nor your beneficiary get anything. The of the common uses for term insurance include debt payoff, education costs, funeral costs, income replacement, inheritance and estate taxes, and mortgage protection.
Permanent life insurance, which includes universal life, variable universal life, and whole life insurance options. This kind of life insurance policy covers you for the rest of your life, and grows cash value in your account, giving added benefit to your beneficiary. The growing cash value also can be of benefit to your during your life because you can borrow against it. Though you won’t have to pay fees or penalties when you borrow some of the cash, you do pay interest on that money. Whatever is owed at your debt will be deducted from the death benefit though.
Online life insurance may offer cheaper and faster coverage than buying from your local agent, but often your choices are limited in policy features. Part of the reason for that is because more complex policy types require more explanation than is feasible online, so online policies are simpler and more easily understood.
Live your life as healthfully as you can — eat right, exercise, nourish your brain and soul — to increase your chances of living a long and healthy life. And buy life insurance to protect your survivors from financial disaster when you die from things you have no control over. There’s no point in having your hard work in developing and running your bed and breakfast go to waste because you didn’t buy life insurance.