What Type of Life Insurance Should I Purchase?
Because of the serious nature of the purpose of obtaining life insurance, it is very important to research the different options that are available for purchase. Each type of life insurance has different benefits associated with it, but there are also different costs and requirements associated with each kind.
There are several life insurance options to consider. When looking for an insurance policy, price is not the only factor that should be considered. Keep in mind that those you leave behind when you pass away will be directly affected by which kind of insurance you purchase. The benefits and values associated with each option should be taken into consideration.
Term Life Insurance
Term life insurance is considered short term insurance because the policy is only effective for a specific period of time, usually not much longer than a year. These policies require a renewal at the end of each term, and as such accrue no cash value. Term life insurance policies are only effective if you die during the term of the insurance policy. If so, the face value of the policy is paid to your beneficiaries.
Term life insurance is the most affordable option of insurance, and premiums rise as you get older. With term life insurance, you can choose to maintain the amount of money you will receive if you pass away and pay higher premiums as you get older, or you can choose to level your policy and keep your premiums the same but receive less money if you pass away at a later age.
Permanent Life Insurance
Permanent life insurance, also called a cash value policy, offer both a cash payout and built in savings plan. This option of insurance has many tax benefits and other advantages associated with it.
Permanent life insurance premiums are locked in at the time the policy is created and will not go up over time. The payout amount is placed in a savings account at the beginning of the policy and gains interest over time. This money is used to pay your death benefits in the event of your passing.
Whole Life Insurance
Whole life insurance is similar to permanent life insurance, except that the insurance company is able to use the interest gained from your whole life insurance policy in the manner which they chose. This style of insurance is cheap and simple.
Single Premium Life Insurance
Single premium life insurance is very simple. At the time you open your policy, you make a lump sum deposit and do not have to make premium payments for the remainder of your policy. Because the money invested at the beginning of the policy is already yours, you can use a single premium life insurance policy as collateral against a loan if you choose.
Universal Life Insurance
Universal life insurance is similar to whole life insurance, but is more flexible because you can chose how much of your premium goes towards your policy and how much goes into your interest gaining savings account. The interest made from your savings can be used to pay your premiums, which could eventually lead to you being able to pay your premiums solely using interest from your account.
Variable Life Insurance
Variable life insurance is the most robust and flexible policy available. You can choose how much you put into your policy and how much you place in your savings account. In addition, you can choose which investments will be made with the money you spend for your premiums. You can choose low risk options or high risk depending on your age and amount invested. The returns and death benefits associated with variable life insurance vary depending on how you invest, but there is a guaranteed minimum amount promised.
The right type of insurance depends on your specific needs. Take some time to consider who will benefit from this investment and what they will need to be comfortable. Browse our site and learn about the various options that you can choose from to make a wise and educated investment in the future of your loved ones. Once you have learned a bit about the various types of insurance policies available, fill out the form on our site to speak with an insurance specialist who can direct you on the right path to building an insurance policy perfectly suited for your needs.