No one really wants to think about it… but if your spouse, children or loved ones rely on your income, what would happen if the unthinkable happened? An adequate life insurance policy would help your family continue to afford and pay for things like the mortgage, school tuition, auto loans and more. Not to mention medical bills that may have accrued, burial costs as well as any other outstanding debts.
LOSING A LOVED ONE IS HARD ENOUGH
insure to avoid passing on debt and expenses
Life insurance comes in a few varieties that we’ll explore below. Some policies allow you to “borrow” and some even accrue interest. Rates vary based on your current age and other factors like physical health and sometimes even your hobbies. Our independent agents will be happy to go over the details and help decide which type of life insurance suits you, and your family’s needs, best.
TERM LIFE INSURANCE
It’s exactly what it sounds like… policies are offered for a specific time period, usually in five to 30 year terms. You’ll pay low monthly premiums throughout the term and coverage stops at the conclusion of the term. The younger and healthier you are, the less expensive it is.
LEVEL TERM
Premium and death benefit stay the same throughout the entire term of policy.
ANNUAL RENEWABLE
Death benefit never changes while the premium typically increases every year. May be less expensive than Term initially, but more expensive as years pass.
DECREASING TERM
The death benefit decreases every year while the premiums remains the same. The death benefit eventually reaches a zero dollar payout.
WHOLE LIFE INSURANCE
A Whole Life Policy is just that, you’ll pay the same premium (monthly or annually) and have the same death benefit for your entire life. Popular with young parents and those seeking alternate investment opportunities. There are some advantages and disadvantages to think about:
CASH-VALUE
A Whole Life Policy offers a tax-deferred investment-like opportunity and can be borrowed against, typically with low interest rates.
INVESTMENT OPPORTUNITY
Possibly a good option if you've maxed out other investment opportunities.
HIGHER PREMIUMS
Whole Life premiums tend to be more than those of a Term Life policy.
LESS FLEXIBILITY
Whole Life policies maintain the same premiums (and death benefits) which some may find too expensive later in life.
UNIVERSAL LIFE INSURANCE
Very similar to Whole Life Insurance, Universal policies will have higher premiums than Term and offer a tax-deferred cash-value that can be used at any time for any reason. A Universal policy also protects you across your entire lifetime. The difference is in their flexibility:
AMOUNT OF PROTECTION
Some Universal policies will allow you to change the death benefit (within limits.)
FLEXIBLE PREMIUMS
You may be able to change the amount and frequency of your premiums, although this will affect the policy's cash-value and ability to maintain future coverage.
INTEREST
Unlike Whole Life Insurance, the cash-value aspect gains interest.
We know that’s a lot to consider, and we’re here to help you navigate all the different possibilities. If your spouse and loved ones rely on your income, having a life insurance policy will assure you that any medical and funeral costs will be covered as well as things like a mortgage, college tuition, auto-loans and more. While it’s never a fun topic to discuss, we know it’s important and are ready to help answer your questions.