Life Insurance: Why You Need It & How To Select A Plan
Life insurance is one of the most critical kinds of insurance you should have. Life insurance quotes can vary, depending on the type of policy you choose and the amount of coverage you want. Let's take a look at various types of life insurance so you can determine which one is right for you.
Term Life Insurance
Term life insurance is probably the easiest to understand. It provides coverage for a specified period of time, usually 10, 20 or 30 years. It is intended to provide for your beneficiaries in the event that you die prematurely, during the coverage period. The payout (the money your beneficiaries get) and the premium (your cost for the policy) remain the same throughout the term. It provides no other benefits.
Whole Life Insurance
Whole life insurance is a permanent insurance policy, providing lifelong coverage and an investment option called the "policy's cash value." This means that the policy will slowly gain cash value from the day it's implemented, and you can borrow against it or surrender the policy for the cash. However, if you don't repay those loans, your death benefit will be reduced, and if you surrender the policy, you no longer have life insurance coverage. The premium will remain the same for your life time and the death benefit is guaranteed.
Universal Life Insurance
Universal life insurance is another form of permanent life insurance, but more flexible. It offers the low-cost protection of term life insurance while also having a savings component like whole life insurance. The premium, savings component, and death benefit can all be reviewed and adjusted as the policyholder's circumstances change. A big difference from whole life insurance is that the savings accumulated over time can be used to help pay the premium. You can access a portion of the balance without affecting the guaranteed death benefit as well.
Final expense insurance is unique. Unlike all other life insurance plans, it specifically addresses the expenses your family will incur in taking care of your remains after your death - the costs of cremation or funeral expenses such as the casket, headstone, etc. While it does nothing to provide for your family's living expenses after you've passed, it does ensure that they don't incur a financial burden in arranging for your funeral. It also tends to be more affordable than other plans, since it's usually for much less.
Group Life Insurance
Group life insurance is typically offered by employers or other membership organizations (banks, credit unions, etc.). By offering wholesale coverage to members, group coverage is often much less expensive than individual coverage. It can be free to members or have premiums taken from paychecks or bank accounts. This coverage only lasts as long as you are employed by or a member of the organization with the contract.
The best life insurance for your family is the one you can afford, and that provides the benefits your family most needs. Whether that's coverage for final expenses or for replacing your lost income, there's a policy that covers it. Call our office today to discuss your options and determine which policy to move forward with.