December 19, 2017
Do You Need Life Insurance When You're LGBT?
READ TIME: 4 MIN.
When you think about how you can make an impact on the people you love, maybe you envision the small things like a hug or the big things like setting aside money for a child's education. But if you really want to ensure that your loved ones are protected, one of the best ways is through life insurance.
Life insurance policies have real, practical applications for everyone. Life insurance for LGBT individuals is no different. Whether you're single, married, or in-between, you can take advantage of life insurance to help benefit yourself, your family, or even the LGBT community at large.
So what exactly does life insurance do? At its most basic, it provides financial resources to a designated beneficiary in the event of your death. It's an acknowledgement that your mortality can have an impact on others.
What is life insurance?
There are different types of life insurance that can help your loved ones through a difficult time. The most common are term life insurance and permanent life insurance.
Term life insurance policies provide temporary protection for a specific length of time, anywhere from five to 30 years. These are usually affordable plans that can protect beneficiaries against your lost income, but these plans don't accumulate cash value. There are no medical exams necessary to qualify, and these plans often just require you to answer a few basic health questions. As long as your policy is active when you die, your beneficiaries will receive a payment.
Permanent life insurance provides lifelong protection and can accumulate cash value on a tax-deferred basis. There are three common types:
Who needs life insurance?
Yes, straight married couples can benefit from life insurance. But so can we.
If you're married, think about how you depend on each other for financial support for living expenses like mortgage or rent, groceries, transportation costs, etc. Can one of you live the same way without the other's income?
If you're a parent, wouldn't it be nice knowing that childcare costs or tuition would be covered if you're no longer around?
And even singles can use life insurance, especially if you have debts such as student loans. A life insurance policy can prevent your debts from becoming someone else's.
If you take care of aging parents, younger siblings, or other relatives, you can purchase a policy that names them as beneficiaries. Or you can take a policy out in their name with yourself as the beneficiary to cover their medical costs or other debts.
How life insurance can help the LGBT community
With a little preplanning, life insurance can help turn even a modest wage earner into a notable philanthropist for the community or other charitable endeavors.
Instead of naming a close relative as your beneficiary, you can leave your benefit amount to a nonprofit organization, educational facility, hospital, or even a person of your choosing. It's a thoughtful way to leave a legacy while helping a worthwhile cause.
Life insurance for retirement planning
Compared to the general population, LGBT people are less likely to have saved or invested for retirement. Life insurance can be used to fill some of the financial gaps you may leave behind.
Your benefit amount can be used to pay off a mortgage, fund a business, or protect your spouse during their retirement years. Or you can use the cash value of a permanent policy yourself to supplement other sources of income.
Insurance policies can also include a provision where you can use the benefit amount to help pay long-term care costs should you ever need it.
The bottom line is that life insurance isn't just a single solution that leaves LGBT people out. It's a universal financial strategy that embraces all budgets, marital statuses, and genders.
Take a look at how you want be remembered when you're gone and whose life you'd like to help in your absence. Then call an insurance agent to make it happen.
