Life Insurance

“Do I need life insurance?”

 

If you have dependents or family, then yes, you do.  In the event of your death, the last thing you want is to shoulder your family with the burden of medical bills or funeral expenses.  Also, if you have dependents, you’ll want to provide a replacement for any income you bring into your household.

 

What kind of life insurance should I buy?

That depends on your financial situation.  If you have a very stable income, and would like your life insurance policy to serve as a type of savings account for your loved ones, then you might want to invest in a whole life policy.

Whole Life Insurance:

Whole Life Insurance lasts for the duration of your life, so it typically has a higher premium than other types of life insurance. The payments are fixed, and the policy has a cash value that can accumulate tax-free over time.  If you are looking for a way to leave behind a nest-egg for your loved ones after you are gone, whole life insurance policies are a great choice.

Universal Life Insurance:

Like Whole Life Insurance, Universal Life Insurance policies are permanent.  The difference is that while Whole Life premiums are a fixed amount, Universal Life premiums can be adjusted over time depending on your needs.  Universal Life policies can also function as a savings account to transfer wealth to your loved ones after your passing.  Also, if you live long enough to negate the need for a large life insurance policy to provide for dependents, money can be withdrawn from a Universal Life insurance policy to provide income during retirement.  Because of its permanent nature, Universal Life policies typically cost more than Term Life policies.

Term Life Insurance:

Term Life Insurance is the most common, and cheapest, type of life insurance.  The premiums are fixed, and you pay them over a set amount of time, usually 20 or 30 years, after which the coverage period ends.  This type of life insurance is great to have if you have dependents, such as a spouse or children, who rely on your income to survive.  The coverage amount can be as little or as much as you desire, with the premium increasing as you up the coverage amount.  If you want to make sure that your loved ones can live comfortably in the event of your untimely demise, Term Life Insurance is a great option.

The upside of a Term Life Insurance policy is that they typically provide a high payout for a low premium cost.  The downside of a Term Life Insurance policy is that once the coverage period ends, you no longer have the policy and you get no money back.

 

Often, people choose to purchase a Term Life Insurance policy when they are young to provide income, as well as money to cover any medical bills or funeral expenses, for their family in the event of their own death.  However, it’s a great idea to also purchase a Universal or Whole life Insurance Policy to act as a tax free savings account that can be cashed in once you no longer need it, or can be paid out to your loved ones at the time of your passing.

 

Call or come by if you have any questions about what type of life insurance policy is right for you!