If you were to pass away tomorrow, would your loved ones be financially secure?
According to the Insurance Information Institute, the answer for around half of Americans is no!
It’s never too early to start thinking about life insurance. But which policy is best for you?
Below you’ll find a brief rundown on the 4 types of life insurance policies you’ll see most often!
click here – How to Evaluate a Charity Before Donating
In the world of life insurance policies, term insurance is the simplest and most common.
The idea is that you’ll take out a policy for a set period of time. Generally, these terms span between 10 to 30 years or so, in increments of five years (10, 15, 20, etc.).
Should you pass away during the period outlined in your ‘term’, your beneficiaries will receive the death benefit outlined in your coverage. But if you don’t? You’ll have to take out another policy.
Though there’s a bit of risk vs. reward at play, term life insurance is often the most affordable.
Think of a whole life policy as a savings account. Each month, you put money into the account. When you pass, your beneficiaries receive the sum in your account.
Unlike term policies, which become more expensive the older you are, whole life insurance policies have a consistent premium rate throughout the entirety of the policy’s duration.
As such, whole life insurance is great for younger people as your account will accumulate more cash value thanks to interest rates.
A universal insurance policy is an amalgamation of whole and term policies, offering flexibility and potential for financial growth.
The policyholder pays a monthly premium but is free to adjust their coverage as needed. Plus, you can access the money in your account should you need it.
However, should you access your savings, you’ll have to account for taxes.
Another major drawback is that the cost of your policy can increase as you age or your coverage changes.
With that said, universal policies can also accumulate cash value, like whole policies, allowing for a greater potential payout.
- Variable Universal
Just when you thought things couldn’t get more complex!
Under a variable universal policy, you’re essentially opening a stock portfolio. You’ll have a series of investment accounts to choose from, with money going into each account as you see fit.
While this could be great for your loved ones if you pass away during a financial boom, you’re also looking at having to manage stock volatility. If your stock performs poorly, your loved ones will receive less payout than they might through a different type of policy.
click here – 3 common cannabis accounting problems
Finding the Best Prices
Once you’ve decided on which type of life insurance policy best fits your needs, you’ll want to gather multiple quotes so you can compare value.
While you likely have local agents who are more than happy to help, online quotes paint a more complete and less confusing picture.
To save even more time, you can use a tool like Ethos, which acts as a digital broker, allowing you to compare and contrast all of your options at once. To learn more about this awesome service, be sure to read this review.
The 4 Types of Life Insurance Explained
Everyone deserves the peace of mind that comes from knowing their family is okay. So consider which of these 4 types of life insurance best fits your needs, and start your policy today.
The sooner you begin, the more your family receives.
And while you’re here, be sure to check out the rest of our great content library!