Insurance Read Time: 5 min

Why do we need insurance?

Insurance provides financial confidence

Insurance can also provide you with more confidence to handle the unexpected. If you’ve ever worried about getting sick or having an accident, buying the insurance that is right for you can help you focus your thoughts and your time on the things that really matter.

Insurance helps protect your lifestyle

The simple truth is that even if you’re happy, healthy, and living your best life, the unexpected can happen. And especially if you have a family that depends on you, there’s a lot you don’t want to leave to chance.  Good or bad, major events are one of life’s few consistencies. The unexpected can—and does—happen to everyone, and many, like getting too sick to work, can be very expensive if you aren’t prepared. The last thing you want is to have a family or loved ones who depend on you and have no plan for replacement income if the worst should happen.

5 Key questions to ask yourself about insurance

  1. If you pass away or get too sick or injured to work, how will your family cover expenses without your income?
  2. Do you have the resources to provide for your family if you become too sick or injured to work?
  3. Does your family have the financial resources to maintain their lifestyle, such as your home and education costs?
  4. Will you leave behind any debts they’ll have to take on?
  5. Do you have access to cash that could potentially be leveraged in emergencies?

How much insurance coverage do I need?

Determining the right amount of coverage for yourself typically depends on certain factors, including your current debt, potential earning power, net worth, and who depends on you. The goal of life insurance is to protect your potential earnings over time. Think of it this way: if you’re the breadwinner of your family and you have dependents, it’s critical that you’re prepared to provide income in the event you get sick, become injured, or pass away.

Two types of insurance to consider to protect yourself and your loved ones

Fortunately, these important issues can be resolved by taking a “protection-first” approach to your income. Beyond paying for immediate needs should you get sick, become disabled, or pass on, insurance can also help support your future self, as some policies give you access to built-in cash value that can help cover emergencies, or even to help fund educational expenses or your retirement.1,2 There are two major types of insurance that can help you protect your income and loved ones: life insurance and disability insurance.

Why do we need Life Insurance?

Life insurance helps protect you and build your financial confidence by providing a tax-free death benefit to your loved ones after you pass away. Some types of life insurance also accumulate a cash value that allows you to pay for larger expenses without tapping into your savings or retirement accounts.

Whole Life Insurance

There are two main types of life insurance: term life insurance and whole life insurance. As its name indicates, whole life insurance provides coverage for your whole life, and provides features like cash value that can help you pay for education, fund your retirement, and protect your family — all things that our research has found to be among the top life priorities of working Americans.

Term Life Insurance

Characterized by lower premiums and coverage that lasts for a specified amount of time—like 10, 20, or 30 years—term life insurance is a more affordable way to protect yourself if you aren’t ready to commit to whole life insurance yet.  On some term life products, riders may be available, such as the ability to donate an extra 1 percent of the death benefit—over and above the amount paid to the designated beneficiaries—to any qualified 501(c) (3) charity of the policy owner’s choosing.3

How do you choose Life Insurance?

While you may be wondering which type of life insurance is right for your situation, the good news is that many types of term life insurance policies can potentially be converted to whole life insurance if and when it makes sense to do so. As you explore the options, a financial professional can also help you determine which type of coverage is right for you based on your situation.

Why do we need Disability Insurance?

Disability insurance, also called income protection, helps protect you and your loved ones if you become too sick or injured to work. It replaces a portion of your income until you can return to work, and can help prevent you from spending your savings or accruing debt. Disability insurance can give you the confidence of knowing that you’ll still be able to provide for your family even if you get sick or injured.

The types of Disability Insurance

There are two major types of disability insurance: short-term and long term. Short term disability insurance replaces your income immediately after an accident or illness. Long-term disability insurance takes effect after short-term insurance runs out and protects against long-term injuries or illnesses. Supplemental disability insurance is a third type, which can be used to add extra coverage to a short- or long-term plan.

Workplace Disability Insurance

Many employers provide disability insurance to their workers. However, workplace disability insurance often only covers 40–60 percent of your income. Many people want additional coverage through an additional individual policy or supplemental policy.

When should I start thinking about obtaining insurance?

In general, the younger you are when you purchase insurance, the less you may pay—especially if you’re in good health without preexisting conditions. If you want the protection and comfort that insurance can bring you, there’s no better time to consider purchasing than now.

Insurance offers you protection and confidence

While things like life insurance can feel complex, preparing for life’s major needs—through planning for protections like insurance or saving for retirement—are the best ways to help set yourself and your family up for a stable future. This helps ensure that when something happens, like a job loss, disability, or death, you and your loved ones will have the resources needed.


1 Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial representative and refer to your individual whole life policy illustration for more Information.

2 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.

3 The Charitable Benefit rider is available on Guardian Level Term policies. Up to a maximum of $100,000. Subject to state availability. Guardian Level Term is issued by The Guardian Insurance & Annuity Company, Inc. (GIAC), a Delaware corporation whose principal place of business is 10 Hudson Yards, New York, NY 10001. 1 888 GUARDIAN (1 888 482 7342). Policy form numbers: GLT 10, 15, 20, 30: 20-GLT Charitable Benefit Rider: 20-CBR GIAC


Individual disability income products underwritten and issued by Berkshire Life Insurance Company of America (BLICOA), Pittsfield, MA or provided by Guardian. BLICOA is a wholly owned stock subsidiary of and administrator for the Guardian Life Insurance Company of America (Guardian), New York, NY. Product provisions and availability may vary by state.

Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.

Brought to you by The Guardian Network © 2022. The Guardian Life Insurance Company of America.

2022-140894 Exp. 7/2024*Pre-approved content*

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