Choosing a Life Insurance Policy
Choosing a life insurance policy can seem a little confusing, but you should always keep one thing in mind: if you don’t need life insurance, then don’t spend your money on it.
Your life insurance will depend on your personal situation but generally, if you do not have a spouse or children, you probably don’t need life insurance. The same holds true if you don’t make a significant portion of the household income.
If you do have a family who you support by paying the mortgage, recurring bills, as well as sending the kids to college, you should probably seriously consider life insurance coverage to ensure that those financial obligations are met, even in the event of your death.
There is no simple rule-of-thumb you can apply to the type or amount of life insurance you need. Many experts believe that if you’re under 40 years-of-age and aren’t family-inclined or have a life-threatening illness, a term life insurance policy with a death benefit but no cash value, is the best way to go.
Term vs. Permanent
Term life insurance is a simple form of life insurance developed to offer temporary protection to those on a limited budget. Term life insurance can be purchased in large amounts and, compared to permanent life insurance, has relatively low premiums. For this reason it is well-suited to meet short-term goals such as paying off a mortgage or to simply provide extra protection for your children. The most common terms are 5, 10, 15, 20, 25, 30, and sometimes 35 years
Permanent life insurance is where the policy remains in effect for the insured’s lifetime. A payout is administered at the policy’s end and it accrues cash value. Permanent life insurance offers an advantage over term-life, because it essentially acts as a savings account from which you can cash in the policy or borrow against it.
Permanent life insurance generally appeals to people with a spouse or other beneficiary whom they want to ensure is financially taken care of after they die. While it is more expensive than term life insurance, permanent life insurance has the advantage of having a cash value, which people can withdraw when they need it.
Regardless of who you are, the bottom line is if you don’t know whether or not you need life insurance, you should do plenty of research before deciding exactly which kind, if any, you should purchase.
So what are you waiting for? InsuranceUSA.com is here to help you find the term life insurance policy that best fits you and your personal situation, while still remaining affordable. Get started now and sleep well at night knowing your family and loved ones will be provided for, no matter what happens!