Learn About The Different Type of Life Insurance Policies
When it comes to choices, we know choosing what fits you is a good thing. In the topic of life insurance, your options can become a little overwhelming. Considering your options, you must account for what fits your life at the moment. If you are married and have a family, life insurance is a must.
Let’s can a deep look into the different types of life insurance that can help you choice what best meets your needs.
A Quick Primer on Life Insurance Types
Life insurance has two main types, term and permanent. All other policies are just different variations of the two. Here is a quick overview of both term and permanent life insurance policies.
Term Life Insurance
Term life insurance is an affordable option for your family. When you purchase a term life policy, an insurance company agrees to pay your family a set amount of money in the case you die during your coverage period.
During your term, you agree to pay a monthly premium. Term insurance is a great option for those who are young, in good health and have a family. When your term is up, “return-of-premium” plans will return your premiums to you tax-free. Some may build cash value over the term allowing you to take out loans against your current policy.
Here are the different options when it comes to term life insurance:
Term life
Level-term life
Non-level term life
Term Insurance is a good choice if you have immediate needs, for example, you have a family and a mortgage. In the event of your death, you can protect your income, or ensure that your partner can pay the mortgage with a term policy.
Most companies will offer 30-year term insurance. This coverage is straightforward and cost effective. It will cover you when you may need it the most.
Permanent Life Insurance
Permanent life insurance plans are most expensive. Since it is a more complex insurance, permanent insurance is in place until the carrier dies. There are three commen types of permanent insurance – universal, indexed, and whole. Unlike term insurance, permanent insurance is designed to pay off your heirs upon your death.
If you are looking for a tax-free option and wish to leave inheritance for your family, whole life may be the best choice for you.
Here are the three common types of permanent life insurance policies:
Whole Life – This is a great option if you are looking for a fixed premium,want to build a cash value that could be borrowed against or want to leave an inheritance.
Universal Life – This policy allows you to change your coverage or payments. With universal life insurance, you can decide how you would like your premiums to be distributed between funding your death benefit and how much is in your cash-value account.
Indexed Universal Life – If you are looking for a flexible option, indexed universal may be the best fit for you. This policy offers an option tied to an index like S&P 500. This type of policy allows you to benefit from market gains and growth in cash values.
So Which Type of Life Insurance is Right For You?
When choosing a policy, it is dependent on your current situation. If you’re a young professional and want to protect your family, a term life policy is an inexpensive way to do so.
If you can afford higher premiums and looking for a tax-free opportunity, or want coverage to leave your family, a whole life policy might be a better option. This type of policy allows you to grow your cash-value account and will protect your heirs upon your death.
Speaking to a professional insurance agent is the best bet to understand all of your options. When it comes to life insurance, it depends on what you are looking for and what your situation is. Let Get Insurance Pricing connect you with the right carrier so you can find what best meets your needs and protects you in the future.
