A Guide on the Different Types of Life Insurance
Did you know that Americans have 15% less saved than they did a year ago? If you’re already concerned about money, imagine what would happen if you weren’t around to support your family financially. Without a plan in place, your spouse or children could be left to shoulder a big financial burden.
That’s why buying life insurance makes a lot of sense. You’ll protect your family if you’re not there to provide for them. Read on to learn about the types of life insurance you can choose from!
Check Out Term Life Insurance
When you’re looking for a cheap life insurance option, term life insurance could be the right answer. That’s because this type of life insurance will provide coverage for only a specified period. This period, or term, could be anywhere from 5 years to 30.
You could choose the term based on your age. For example, if you’re 35, you may want a 30-year plan. That way, if you pass away before you reach retirement age, you can provide financial help to pay a mortgage or car loan.
One of the advantages of term life insurance is that you can cement a monthly price that won’t change throughout the term. On the downside, if you live longer than the term you sign up for, you won’t pass on money to your designated beneficiaries.
Be aware that several health-related factors can impact your monthly payment, too. For instance, if you are a smoker or obese, you pose more risk and therefore could cost more to insure. For many policies, you’ll need to undergo a health screening that includes bloodwork.
Consider Whole Life Insurance
With a whole life insurance policy, you’ll have coverage until you’re no longer around. In other words, you don’t need to worry about estimating a term that seems appropriate given your age.
How much is life insurance? You’ll lock in one premium that you pay until you die with whole life insurance. And depending on the policy, you may actually get a yearly dividend.
You can think of this type of policy as providing both a death benefit and a savings account, or cash value. With the cash value element, you’re adding some money to a savings account that can grow over time — assuming you don’t use it. But before selecting a whole life policy, keep in mind that you’ll probably pay a higher monthly premium.
Because whole life insurance can be seen as an investment, too, it’s wise to know what death benefits you’ll get. When in doubt, head to Compareinsurancequotes.com to find the best life insurance options and compare prices!
Investigate the Flexibility of Universal Coverage
Universal life insurance is similar to whole life insurance but has some distinct differences. Like whole life insurance, you can trust that your beneficiaries will receive a death benefit with a guaranteed universal plan.
You’ll have both a cash value and death benefit with one of these policies, too. Because of this, your monthly premiums help cover both the death benefit and savings. And those savings may grow.
One of the key benefits of a universal plan is the ability to change how much you pay for your premiums. For instance, you can pay less each month. You’ll need to understand, however, that you’ll lose the payment difference from your policy value.
There will be a minimum required payment, too. And if you don’t end up paying your full premium, you won’t reap the same cash value benefit.
Add Supplemental Coverage
If you already have life insurance coverage, you may want to consider supplemental coverage. Supplemental coverage can come in the form of term, spousal, or permanent policies. And you won’t need to undergo a health exam to screen for eligibility in many cases.
Typically, you can get this coverage through an employer. Keep in mind, however, that you can lose coverage if you lose your job or change jobs.
On top of that, the employer will pre-determine what the benefits are, so you won’t have any say. Check with your employer’s human resources specialists. They can tell you what benefits are included before you choose to accept a policy.
On the plus side, you may not need to pay anything to get a low level of coverage through your employer. Your employer may provide this as part of its benefits package. But if they don’t, it’s worth comparing costs to see if you’re better off adding supplemental coverage through your existing insurer.
Look into Joint Life Insurance
Are you married? If you have a spouse or domestic partner, you may want to look into a joint life insurance policy. This translates into one premium that will cover two people.
Options include a first-to-die or second-to-die policy. With the former, the death benefit is paid to the surviving partner covered in the policy. With the second-to-die policy, the money will go to a beneficiary once both partners have passed away.
Just know that you’ll only get a benefit if one partner dies, or it will go to your beneficiaries. On top of that, the remaining partner will not be insured after the other one passes. If the remaining partner’s health has deteriorated, they may struggle to find another insurer willing to give them a policy.
Explore Different Types of Life Insurance
With several different types of life insurance, it’s worth the time to see which one is right for you. Term life insurance represents the cheapest option, though it will expire after a set timeframe. With whole, universal, and joint life insurance policies, a policyholder won’t need to worry about the policy expiring.
When you’re ready to learn more about financial matters, come back for fresh and informative articles.