article written by: Mike Alexander, Jr. 08/04/2021
You may have been offered life insurance as part of your company’s insurance benefits package, but what exactly is it? Simply put, life insurance is protection for your family and loved ones in the event of your passing. It triggers the release of a sum of money to your beneficiaries to aid with the cost of burial, medical expenses, and general life expenses if you are a primary source of income for your family.
However, that isn’t the only way life insurance can give you peace of mind and security in trying times. There are many plans that also cover critical illness, meaning you may be able to seek treatment that you otherwise would not be able to afford, and your loved ones will be able to make ends meet while you are out of work.
There is no “one size fits all” plan for life insurance, and there are many factors to consider when you’re choosing the best plan for you.
When Should you Consider Life Insurance?
Death and terminal illness are not topics that might typically occur to us when we’re young, but selecting a life insurance plan when you are younger can have many benefits. Payments may be smaller as there will be more time to pay into the plan, for instance. And, the earlier you begin paying into your life insurance premiums, the better payout will be available for your loved ones upon your passing. Life insurance plans can begin as young as 18 years old. However, if you are older there are still plenty of viable options for coverage, including affordable options that are flexible enough to cover anything from funeral expenses to critical illness.
What Kind is Best for You?
There are two major categories of life insurance: term and permanent. Term life insurance covers you for a set period of time (up to 30 years) and can be renewed on a year-to-year basis once that term is met. Permanent life insurance is just that — permanent. It covers you for your whole life and does not need to be renewed. But which one is right for you? If you would like a quote, visit our site https://www.getagreatquote.com/insurance-quotes/personal-insurance/life-insurance/ or CLICK HERE
Term
Most term plans are built to be started between the ages of 18 and 65. They typically have the highest benefit amount but you will not be able to lock down your rates for more than 30 years, after which rates can change every year you renew your plan.
Final Expense
This is the most affordable option for those who select their plan at an older age. The benefit amount is meant to cover funeral expenses, medical bills, and outstanding debt, so it’s smaller than with other plans. However, the rates are low and there is no health or age requirement.
Whole
This is a permanent plan that covers you for your whole life, allowing you to lock down a rate that will stay with you forever. The benefit amount varies based on your plan, but there is an added benefit of being able to take out loans from your policy for things like medical expenses and other emergencies.
Universal Vs. Variable
Both are whole life plans that have a cash value component that is invested in a similar way to your typical retirement plan. Unlike a standard whole life plan, universal and variable plans have no guaranteed interest rate, as the money is being invested. However, there is a chance for growing that cash component more than with the normal whole life plan, and a point can be reached at which your benefit amount is fully paid for with the cash component, negating the need for payments. Variable differs from universal in that your cash value component can be added to your benefit amount.
What Can you Afford?
Life insurance isn’t going to be much help if high rates put you and your family in a poor financial situation. Likewise, going for the cheapest plan possible may not give your loved ones the benefits they need. That’s why it’s vital to determine what you can really afford. The cost of these plans is going to vary based on which company you select your plan from, the number of years you will be paying premiums, and the benefit amount you set when you select your plan.
How Long Should you Buy it For?
As mentioned previously, the longer you pay into your plan, the more affordable it can be to give your loved ones a significant benefit amount. Not only that but buying a plan at a younger age will help to cover your loved ones in the event of an unexpected death or critical illness before you’ve aged into some of the shorter term plans.
However, if you are unable to afford life insurance or have not selected a plan for any reason after the age of 65, or otherwise have health issues that may make qualifying for a plan difficult, a final expenses plan will allow you to cover some basic expenses associated with death and burial.
If you or someone you love would like additional information, call our office at 800-362-2809 or visit our website at https://www.getagreatquote.com/insurance-quotes/personal-insurance/life-insurance/