Life Insurance

What Can Life Insurance Cover?

Dec 11, 2018
Couple sleeping in with dog
Life insurance is an essential part of protecting your family in the long run. If you have loved ones who rely on you—whether financially or in other ways—life insurance is a way to make sure your family will continue to be provided for even after you’re gone. Here are just a few things it can (and can’t) cover.

Large Debts

If you’ve co-signed for any debts, whether it’s a mortgage or a dependent’s college tuition, your co-signer becomes liable for the full amount if you unexpectedly pass away. Even if you haven’t co-signed larger financial obligations, other bills like car mortgage payments still need to be paid. Life insurance fills a crucial function by making sure your loved ones can keep paying the loans on those big-ticket items that are vital to their stability.

End-Of-Life Expenses

In America nothing is free, and that certainly applies to funerals. Burials and associated expenses can often cost anywhere from $6,000 to $10,000, and that doesn’t even include things like monuments, markers, and flowers. Life insurance helps protect your family from what can become a huge bill at the most difficult times.

Regular Expenses

From weekly expenses like groceries and putting gas in the car, to monthly expenses like rent and utilities, your family has a number of regular expenditures they could become solely responsible for. Life insurance gives you the peace of mind to know that your loved ones won’t struggle with these day-to-day and month-to-month costs.

Dependent Care

If you have children, you know they bring a variety of joys—as well as expenses. From daycare to saving for college, term life insurance helps ensure your children are taken care of in your absence. If you have elderly dependents, it can also help cover the cost of their caretakers as well.

Stay-At-Home Partners

You may think that life insurance only makes sense for the breadwinner, but a stay-at-home partner also provides tremendous value to a family that could be lost. If you were to hire people to do all the things that these individuals handle every day, the cost could go up to six figures—annually. So, it’s essential for stay-at-home family members to have coverage as well.

What Doesn’t Life Insurance Cover?

Life insurance payouts can help cover all sorts of expenses and reduce financial stresses during tough times. However, they may be reduced or canceled completely in certain circumstances. Luckily, these situations are easy to avoid.

Application Fraud

If the insured person lies or misrepresents information on their application form, payments can be reduced or canceled entirely. For example, falsifying your medical history or applying under a different identity could trigger this penalty.

Blameful Circumstances

If the insured person takes their own, their life insurance policy will likely be revoked. This would also be the case if the policyholder dies while committing a crime.

Conflicts of Interest

If there are provable suspicious circumstances around the death of the policyholder connected to the beneficiary, the insurance policy will obviously not be paid out.

In short, outside of a few rare circumstances, life insurance provides your loved ones with the financial security you would want them to have. If you don’t already have coverage, Ethos offers term life insurance with a simple enrollment process. Just answer five easy questions, and we’ll give you a quote almost instantly.