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Life Insurance to Protect Your Family

Updated March 4, 2020 . AmFam Team

Life insurance offers financial protection for the ones that matter most to you. Learn about the benefits of life insurance plans and coverages with American Family.

While you may not be able to provide for your family forever, the good news is you can plan to help protect them financially with the purchase of life insurance. If you’re starting a family, this is a great step toward making sure they’re protected if you were to pass away.

What are the benefits of life insurance and how exactly does life insurance protect your family? Let’s take a look.

Life Insurance Benefits: Financially Protect the Ones You Love

When it comes down to it, buying life insurance isn’t meant for you — it’s designed to protect your family and loved ones when you’ve passed away. And if you’re responsible for the financial security of a partner, child, disabled loved one or aging parent, life insurance is a smart way to help make sure they’ll have financial security in the future.

Here are just a few of the ways life insurance can help you protect the ones you love:

Financial Security for Your Family

Life insurance can help provide peace of mind that your family will have some financial protection upon your passing. The death benefit can provide assistance with things like mortgage payments, care of disabled loved ones and basic needs like food and childcare. Ultimately it could allow your loved ones to maintain their current standard of living without worrying about the lost income.

Read more about how life insurance works to gain a better understanding of this important coverage.

Coverage for Final Expenses

The cost of final expenses — like caskets and burial plots — often amount to thousands of dollars. That’s a hefty out-of-pocket cost that you probably don’t want your family to be troubled with after you pass. Life insurance can help pay for things like cremation, burial and funeral services, among other things.

Learn more about how life insurance can help with final expenses.

Coverage for the Cost of Medical Bills

If you were to pass away from a health-related issue that racked up a substantial amount of medical bills, your life insurance policy could help your loved ones pay for those expenses.

Cash Value Component

A cash value life insurance policy, like American Family Life Insurance Company’s DreamSecure Whole Life Insurance or DreamSecure Flexible Life Insurance, has a component where you can build up cash value. This is a way that life insurance can help your family financially while you’re still living.

Once you’ve built up enough cash value through paying your premiums, you can borrow* against it for things like a down payment on a home, school tuition or investing in a business. The cash value is available to use as you please.

However, if you don’t pay back the loan before you pass away, the outstanding loan balance plus any unpaid interest will be deducted from your death benefit.

Learn more about life insurance policies with this cash value feature to better understand the benefits of cash value.

What is the cost of life insurance for your family?

Now that you know how life insurance can protect your family by helping to provide financial protection, use our life insurance calculator (Opens in a new tab) to get an estimate of the coverage you need for your family. The calculator can help you understand how much life insurance you need to help secure your loved ones’ financial futures.

Choosing a Beneficiary

In order to protect your family with life insurance, you’ll want to make sure you’re naming the appropriate beneficiaries. Typically, a beneficiary is the spouse or partner of the policy holder, but many people also want to leave money to their children and choose to do so by creating a trust. Think about who will be responsible for your debts, estate taxes, mortgage or nursing home expenses when choosing a beneficiary.

You can have more than one beneficiary, too. Some policies will even let you decide how much of the death benefit goes to each one. If you’re planning to manage multiple beneficiaries, like your partner plus each of your adult children, it’s a good idea to connect with your insurance agent to talk about your plan. Learn more about choosing a life insurance beneficiary.

Learn More About Protecting Your Family With Life Insurance

Take a look at life insurance from American Family Life Insurance Company to learn more about our coverages. When you're ready, connect with your American Family Insurance agent; they're a great resource to answer any questions and can help you customize coverage to fit your needs. Life insurance is all about protecting those who matter most, and it’s one of the ways we can help you protect your dreams.

*Disclaimer: Any loans taken from your life insurance policy will accrue interest. An outstanding loan balance (loan plus interest) will be deducted from the death benefit at the time of claim or the cash value at the time of surrender. If the loan balance grows too large for the cash value to support it, the policy could terminate.

Policy Forms: ICC17-225 WL, L-225 (ND) WL, L-225 WL, ICC17-227 WL, L-227 (ND) WL, L-227 WL,), ICC21 L141 MS 01 22, L141 ND 02 22, L141 SD 02 22

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