Term Life Insurance, Whole Life Insurance, Universal Life Insurance- What type of life insurance is right for me?
Most folks understand the basics of life insurance. You pay for a policy and your beneficiaries receive money when you die. It is that simple. However, when it comes to choosing the type of coverage that is best for you it pays to educate about the different options available to you.
Whole Life Insurance
Whole life insurance policies are designed to offer you coverage that lasts a lifetime. Once you qualify for a policy, it is yours as long as you maintain your premium payments. Since whole life is meant to cover you until you die, the premiums are higher since the insurer assumes they will have to pay out on your policy sooner or later. In addition to having a guaranteed death benefit to protect your family, these types of policies usually accumulate a cash balance which can be withdrawn under certain circumstances. Your agent can tell you more about your options with whole life insurance.
Term Life Insurance
One of the drawbacks to whole life insurance is the higher premiums you will pay for permanent coverage. For those on a budget there is another option: Term Life Insurance.
Term life policies are typically offered in ten to thirty year increments. As other types of life insurance, they pay out a death benefit to your beneficiaries in the event that you die while the policy is in force. Premiums for these types of plans are typically less than you would pay for a similar amount of permanent coverage, allowing you to maintain a sizable policy at a fraction of the cost of whole life. The trade off is that you will only have the coverage for a set number of years, and the policy will not build up cash value as a whole life policy would.
Universal Life Insurance
Universal life insurance was designed to give policy holders more flexibility than whole life insurance by allowing them to balance their premiums between paying for the actual insurance, or to enhance the savings component, or cash value, of the plan by investing more of the premium into savings. Premiums for this type of life insurance are variable depending on the policy owner’s current circumstances, and with new products that offer attractive rates of growth, Universal Life insurance is growing in popularity.
Life insurance is important for the sake of your loved ones. To find out more about the style of coverage that fits your needs and the amount of coverage you can afford, use our online insurance calculator to find the plan that works for you.