Why should teachers get a universal life insurance policy? There are many reasons that an education might find a universal life insurance contract to be the missing piece to their financial plan. We will go through some of the reason below.
Universal life insurance is more cost effective than other forms of permanent life insurance contracts such as a whole life insurance. This is be a key trait for teachers as a portion of their income is stashed away to fund their pension when they retire. Being able to save and have a cash value in their life insurance can be a fall back in a scenario where a teacher might need some extra cash.
When teachers retire, they are faced with a decision on what pension option they should take. The ‘max pension option’ will provide you with the highest income for which you are eligible. All the other options – called “Survivorship options” – will provide an income less than the max option. The ‘max pension option’ will provide you with income until you pass away. Once you pass away, your pension income goes away – it will not be passed on to your spouse or children. Survivorship Options provide a safety net for your spouse – if you pass away and you have a survivorship option – your spouse will receive a pension income for as long as she lives. Having a universal life insurance policy will allow you to take the max pension option without sacrificing coverage for your loved ones in the worst-case scenario.
Protect Education Savings
As an educator, you understand the importance of making sure your children will have a chance to be able to attend the school of their choice. A teacher’s income is often a major source for savings for a family and some of that savings will likely go towards college savings or saving for a private high school education. If something were to happen to the teacher’s income, the family might not be able to sufficiently save for retirement and education while living everyday life. Having a universal life insurance contract might be a saving grace for that family. The death benefit should be able to help pay off the mortgage and pay for a college or high school education.
Cover Child Care Cost
Not just the breadwinner who needs life insurance. Stay-at-home parents should have coverage too, even if they don’t earn income. A stay-at-home parent provides valuable services, such as childcare, that the surviving parent would have to pay to replace. A life insurance payout could also enable the surviving breadwinner to take a few years off work while the family regains footing. This goes doubly for teachers who might be the one that is taking care of the children during the summer months when they are off from work and their children are off from school. Often times if one parent is a teacher they will be able to take care of the children during school vacations whereas the other parent working a 9 to 5 job might need to pay for someone to take care of the children if something were to happen to the teacher in the family.