Life insurance is compensation for a beneficiary in the event of an insured individual’s death. There are several types of life insurance policies that cover a range of situations. Many have this coverage as part of their group insurance plan through their employer. However, it’s also a good idea to purchase separate coverage which is not dependent on your employment and could be a higher amount of coverage. When it comes to selecting the best life insurance for yourself, there are a number of options to choose from that revolve around budget, timing, and flexibility. These plans include:
Term Life Insurance
Term life insurance is purchased in terms, usually 10,15,20,25, or 30 years in length. For the budget-conscious, it is the most affordable life insurance option. This is because term life insurance offers only death benefit protection and does not have any cash value that accumulates over time in the policy. At the end of a term life insurance policy, it must be re-purchased in order for a new term to begin.
Permanent Life Insurance
Permanent Life insurance offers more than term life insurance because it not only includes death benefit protection, but also has a cash value component. This means that there is more money to be gained from the policy over time. A plus for permanent life insurance is the fact that it is not on a fixed term, and once purchased (as the name suggests) is valid for the remainder of the insured person’s life.
Whole Life Insurance
Whole life insurance is the simplest form of permanent life insurance. With this type of coverage, the premium amount is locked in from the beginning and remains the same for the entire length of the policy. This is especially beneficial for anyone who is not interested in the restrictions that come with a term life insurance policy, but still want to stick to a budget. With a whole life insurance policy, you are guaranteed to pay the same premium throughout your entire life, regardless of age and illness or other health complications.
Universal Life Insurance
Similar to permanent life insurance, a universal life insurance plan offers death benefit protection and a cash value, with the difference being the insured person is able to choose how much of his or her premium goes towards the policy’s death benefits and how much goes towards the policy’s cash value. In addition to these benefits, our universal life insurance policies also offer the option to withdraw cash from the policy at any time for whatever reason, including debt payment, supplementing retirement income, or even to go on vacation.
The benefits of a life insurance plan far outweigh the costs, with not only yourself benefiting, but also your loved ones. A life insurance plan can provide funds:
- To allow children to pursue their education.
- To pay income taxes, outstanding debts (mortgage, personal loans, lines of credit, etc) or probate fees.
- To pay for funeral / burial and any associated legal expenses.
- To leave to your favorite charity.
- To ensure the continuation of your business.