Life Insurance
One of the cornerstones of financial planning is to prepare for when you die. Life insurance is a safety net for families or spouses if something were to happen to them. Purchasing proper life insurance will help provide financial compensation to your family, parents, or spouse if the policyholder dies.
Life insurance is a contract between an insurance provider and the individual. Regular payments will ensure that the company pays a sum of money to a beneficiary when the policyholder has passed. This financial protection can vary depending on your monthly payment, insurance provider, genetics, and age. Getting life insurance means that your family and dependents can focus on grieving instead of paying off debts or covering living expenses.
Term Life Insurance Vs. Permanent Life Insurance
There are two primary types of life insurance that users need to know about, term life insurance and permanent life insurance.
Term life insurance will only provide coverage for a specific period (usually 10, 20, or 30 years) for those who want a more affordable option. Term life insurance is the best option for young families or those on a strict budget. These policies will expire if the holder doesn’t pass away during this period. Payout from an insurance company will only happen if the holder dies during the coverage period, but you can renew these term life insurance policies to extend for longer.
Permanent life insurance is split into whole life insurance, universal life insurance, and variable life insurance.
- Whole Life Insurance: Provides a consistent premium over your entire life and guaranteed cash value growth. This means that the payout rate will be higher because it is treated as an investment.
- Universal Life Insurance: Offers more flexible premiums and after-death benefits. Universal life insurance will also accumulate cash value and those who borrow against the accumulated cash value will not be affected by taxes.
- Variable Life Insurance: Also allows the investment of cash value in multiple sub-accounts and provides financial reliability over your entire lifespan. Variable provides flexible investing based on your goals, risk tolerance, and timeline.
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How To Choose The Right Policy
Finding the best policy for your needs can be overwhelming, especially with the dark undertone that often comes with life insurance. While many of us don’t want to think about death or what will happen to our family when we die, thinking about these details will help you choose the best life insurance policy.
Assess Your Needs
Evaluate your current financial obligations, debts, and future goals. Each family will have their own unique needs and risks, which is why flexible policies are best for most families. Assess the needs like child care, home longevity, or higher education cost.
Consider Your Budget
Life insurance premiums can change depending on external factors like age, health, genetics, and the type of policy. Finding a policy that meets your needs but also is affordable at your current financial standing is important to finding the right insurance policy.
Compare Policies
There are many insurance companies that will offer life insurance, so it is best to research all your options before choosing a policy. Shop around and compare policies from reputable insurers to find one with the best coverage. Exclusions, limits, and premium prices are things that individuals should look at when shopping for insurance.
Misconceptions Around Life Insurance
Some people may feel that because they are single or are young, they don’t need life insurance. However, the benefits of life insurance are applicable to anyone. There is no real way to plan for the future or the unexpected, but life insurance policies help to provide a little bit of peace of mind.
Even if you are young and have no current health risks, you can lock in lower premiums and ensure that you have comprehensive coverage when illness or health concerns do arise.
If the premium payments seem just a little too expensive, term life insurance policies are an affordable option that still provides protection. Buying a term life policy early on in your life will keep premiums affordable because you are lower risk.
Finding Policies With Tower Insurance
Our team will help you narrow down the multitude of options that exist in the insurance industry. Many companies will promise low premiums and optimal protection, but they may not be able to deliver. Tower Insurance helps you compare policies side by side so you can make an informed choice. Reach out to our experts to start the insurance search and protect your family for the future.