Identifying if you do or do not want life insurance is not difficult, most of the challenges will come once you must commit to a specific type. Many people do not even realize that there are multiple types of policies to pick from, each with their own unique set of costs, requirements, and benefits. Understanding at least the most common options can help you make a more informed decision that is specific to your personal expectations and goals for carrying a life insurance policy.
Term Life Insurance
Term life insurance is one of the two most common policy styles available. Simply put, term, refers to a specific number of years that this policy will remain active before it expires. Noted as being the simplest as well as the most accessible life insurance policy, term life insurance is also more affordable. Should you pass away before the term of this policy has elapsed a set amount of money will be paid to your beneficiary.
You should take age into consideration with any policy that you pick, however as baby boomers are reaching retirement age those who have not yet nailed down their life insurance policy also need to consider the possibility of needing long-term healthcare. Long-term care insurance is not the same as life insurance, but it is important to understand how they can work in tandem with each other, as well as independently. Setting your finances up to be able to handle the possibility of the unexpected means that you are relieving yourself of one less burden as you age.
Whole Life Insurance
Whole life insurance is a permanent plan and does not expire. Individuals who hold this type of policy can expect to pay higher premiums however there is the benefit of more flexibility regarding accessing the funds. If you pay the premiums, your whole life insurance will remain active. There is a cash value element to this style that does not exist with term life insurance that can result in the details being more complex in comparison. While this is the second, of the two most common types of life insurance consumer demands have resulted in changes in the industry as a whole. This is why it is essential to have a baseline knowledge of what is available so that you can also recognize the changes as they occur.
How to Pick
Realizing that term, and whole life, are just two of the multiple options available for a life insurance policy can be enough to make your head spin. Add in that you also need to decide which company you give your business to and now your process is even more layered. Fortunately, there are some universal and basic questions to ask yourself as you move forward through this process. Since these companies are in competition with one another for your business, it is not unheard of for them to be accessible to help and guide your decision-making process. At the end of the day, you need to, and should, feel comfort because of your decision.