Life insurance is the only insurance product that is purchased to assist the financial stability of someone other than you. Life insurance is mainly broken down into two different types: whole and term. Assessing your lifestyle, health, and a few other factors will determine which life insurance product will be a better fit for your investment.
Let’s first look at term life insurance; this insurance product for “the event of death” comes in a wide range of choices. You can choose a 5-year term all the way up to 30 years. Generally, a licensed insurance agent will help recommend the best amount of years for you. When purchasing term life insurance you can get up to a covered amount of $350,000 without the need of a medical exam. For higher coverage, they do require a small physical to determine the state of your health and your insurability.
Term is a great product because the premium costs are much lower than the cost of whole life insurance. One of the many things that need considering regarding life insurance is the amount of coverage you need. If you do not have dependents, it is a wise investment to buy a term policy covering the expenses of funeral costs. Remember, that in the event of your death someone will still need to pick up the financial burdens of properly “laying you down to rest.”
The many factors that go into deciding the term policy coverage amount is based on how much you want to provide for those left behind. Do you want the policy to cover future college tuition? Do you want enough to cover the cost of the mortgage? Many questions will need answering in order to determine the coverage amount, as well as, whether term or whole life insurance is the best choice for you.
The second type of insurance that you will come across is whole life insurance. Whole life insurance is costly. You pay higher premiums because it covers for the “whole” of your life. This insurance product has wrapped into it an added benefit of cash value. Meaning that you can withdraw a loan amount based on the buildup of cash value on the whole life insurance product, there are however, many different types of whole life products, it is highly suggested you read more on all the whole life products.
Overall, term life insurance is the more sought after insurance product because of its lower premiums. It is worth speaking to a licensed agent about the different choice options on term life insurance quotes, you might be pleasantly surprised by the low cost of purchasing a policy with the coverage amount of $500,000 or more.