Term Life Insurance for Gays: The Facts

Term Life Insurance is simply the best way to ensure that your loved ones are provided for in the event of your death. Millions of Americans benefit from this simple policy that offers security and peace of mind at the most difficult time in their lives. The vast majority of couples enjoying these benefits are straight couples with their own children. This means that the market is weighted in their favor. Term life Insurance for gays is a subject that needs to be addressed as the modern American family is changing.

What is Term Life Insurance?

Term Life insurance is a contract between your Insurance company and you that promises to pay a set amount to your dependents in the event of your death. There is often no medical. These policies are available for a fixed term of between 5 and 30 years. You pay a monthly premium in return for an agreed cash amount payable to your beneficiaries if you die within the set term. The premium price depends largely upon your age. The premiums increase as you get older. There is more chance of you dying nearer the end of a 30 year term. Term life insurance for gays should follow these same basic principles.

The average cost of a funeral in America is $14000. The average net savings of the average American family are less than $5000. These costs have to be taken into consideration in the first weeks after your spouse’s or partner’s death. You may have mortgage payments to make on your home. Your children or adopted children may be going to college. Death is expensive. Term life is cheap. This means that you can opt for more coverage. Your policy can cover all of your family’s financial needs.

Why is Term Life Insurance for Gays so Important?

If you are in a gay relationship when your partner dies you are ineligible for many of the benefits you would receive from the state if you were in a “traditional” marriage. Defined pension plans and social security benefits will not pay you the income that you or your family should be entitled to. This is why term life insurance for gays is so important. Tax laws do not provide your estate with the same amount of shelter as a married couple. The IRS does not yet recognize same sex marriages. There are ways of covering your family so that your partner and children can enjoy the full benefits.

Cross Owning Term life insurance Policies

This is a simple way of covering each other for death benefits. You each take out a term life policy on each other naming yourself as the beneficiary. The lump sum that you receive after the death of your partner can then pay you an income or be invested to provide one. Your partners estate will not be liable for the proceeds for local or federal tax purposes. This is because they did not own the policy.

Individual Policies

This is a method where you buy the policy. You then name your partner as the beneficiary. They will receive a lump sum to invest for their financial future when you die. This cash amount IS included in your estate. This is because you own the policy and will have to pay federal taxes on it. Remember that different states have different exclusion limits. Any amount over this limit will be liable for local taxes.

The Future of Term Life Insurance for Gays

Term life insurance for gays is much easier to obtain now compared to 10 years ago. Insurance companies used to deny couples cover because they weren’t married. The fact that unmarried heterosexual couples could get insured highlighted the unfairness of this policy. The legalization of gay marriage in some states of America has further helped the cause of same sex couples who wish to buy insurance.

It is now impossible for a company to deny you cover on the basis of your sexuality. This does not mean that you will receive the same cover as another married couple of a different sexual orientation. Changes in the law are happening slowly. You are not playing on a level field.

This makes finding an agent you can trust all the more important. Your business is important to them. It is vital that you shop around when you want term life insurance for gays as the price will vary widely from company to company. It will also vary from state to state. If you live in a forward looking state where same sex marriage is legal your search will be easier.

It is difficult to put a price on the peace of mind that the availability of term life insurance for gays is giving same sex families in America today. The knowledge that your family will be looked after if you die is a comfort that we all deserve.