You probably know that you need life insurance to protect your family, and provide necessary financial assets in the event of your passing. But there are many different types of life insurance, geared toward different needs. So as you compare policies, here are just a couple of primary ideas to keep in mind.
Life insurance can provide for a temporary need, or it can function as an investment. A simple term life policy lasts for a specified number of years. If you pass away during this time, your beneficiaries will receive the benefits as stated by the policy. Typically these life insurance plans are offered for much lower premiums, and the purpose is to safeguard against loss of income and burial expenses in the event of your death. These policies are often chosen by young to middle aged people, for the primary purpose of protecting a spouse and/or children.
On the other hand, life insurance policies can also be more complex, and even function as investments. Many types of whole life, or permanent life insurance policies allow you to build cash value within the plan. You can withdraw some of these funds when unexpected expenses occur, or you can borrow against the policy. Some of these contracts also offer living benefits, so that you can actually claim the benefit while you’re still alive (such as in the event of a terminal illness). In this manner such life insurance plans can possibly function as retirement planning options by providing needed income late in life.
The difference here is knowing what type of policy you actually need, and enrolling in one designed for your purposes.
Life insurance doesn’t have to be expensive. Many people assume that they can’t afford a life insurance plan, but that’s probably because they haven’t evaluated these differences in policies. Pretty much everyone needs at least a basic term life policy, so that survivors aren’t burdened with burial costs in the event of an unexpected death. You might also wish to provide for their economic security… And term policies aren’t expensive at all.
Give us a call and we’ll discuss your life insurance needs in more detail. Once you learn more about how the different types of life insurance can function, we can match you up with the protection that suits your situation.
