If you are looking for the best kind of life insurance to meet your needs, you’ll want to consider several questions first:
Once you answer these questions, you will have a better understanding of what type of life insurance will be the best fit you’re your family’s need for protection and fit your budget.
Two Basic Types of Life Insurance: Term Life and Whole Life
Term life insurance is the best option for most people, including seniors, because it provides the most coverage at the lowest price — especially if you’re in good health. It offers coverage for a specific number of years (usually 10 to 30 years in five-year increments), and the premiums are the same every year.
The policy "Term" is the duration of your insurance coverage. Term life may offer term options of 10, 15, 20, 25 or 30 years of protection.
If you pass away during your policy term, the death benefit is paid out to your beneficiary. If you are alive when the policy term ends, there is no payout of any benefits and your coverage ends.
If you need life insurance lasting for 30 years or less, or you are on a budget and need the most life insurance at the lowest price, then term life may be a good option for you.
Whole life insurance is the best option for people who can afford to spend more money, and need their insurance to last for as long as they may live; whereas as; term life lasts for a maximum of 30 years.
Whole life lasts for your entire lifetime, as long as you pay the premiums on time. The policy pays out a death benefit upon your death, and builds up some cash value inside your policy over time.
What is a Life Insurance Policy?
A life insurance policy is a contract between the named insured and the insurance company wherein the insurance company agrees to pay an agreed upon sum of money (Death Benefit) to the insured's named beneficiary, upon the death of the insured person. In addition, the owner of the policy agrees to pay premiums to the insurance company on a regular basis in return for the life insurance protection.
The Best Types of Life Insurance for the 4 Stages of Life
What is the Reason for Buying Life Insurance?
People buy life insurance for a number of reasons.
One of the primary reasons is providing income protection for a family in the event a breadwinner passes away.
Another reason is providing financial security for children should something happen to the parents. Life insurance can even be a way to offset estate taxes in large estate plans, or maintain your family’s lifestyle upon your passing.
Should Everyone Own a Life Insurance?
Probably the biggest reason why anyone would ask this question is because life insurance is one of the few financial provisions that has no immediate benefit – at least not to you as the owner of the insurance policy.
Life insurance is about providing for other people after your death.
Everyone should have at least some life insurance if you have anyone who relies on you for financial support, or you have not saved enough to pay for your final expenses.
Do You Really Need a Life Insurance Policy?
If you have life insurance through your work, you should still buy your own life insurance policy.
The reason you should never only rely on life insurance through your employer provided group life plan at work is that you could lose your job, or decide to change jobs and once you do that, you lose that life insurance protection provided through your ex-employer.
Who is Life Insurance Best Suited For?
Term life insurance is best suited for people who need insurance coverage for a specific duration.
For example, if you are 40 years old and want to cover your income until retirement at age 65, you can purchase a 25-year term life insurance policy.
Whole life insurance is best suited for someone who needs guaranteed lifetime protection, and has a budget that can afford to pay the higher premiums.
What are Some Good Life Insurance Carriers?
Some of the leading life insurance companies include Prudential, Metlife, Northwestern Mutual, Transamerica, ING, New York Life, Mutual of Omaha, and Mass Mutual Life Insurance Company, among others. Here is a list of leading life insurance companies in the USA.
How Much Does Life Insurance Coverage Cost?
The cost of a life insurance policy depends on several factors, including your age, gender, health, lifestyle, tobacco use, the type of coverage, and the policy's face value.
Term life and whole life plans are the two most popular types of life insurance, with term life being the most affordable by far.
Typical term life rates range from about $30 to $60 per month for a middle-aged person. Whereas, whole life may cost several times more for the same amount of insurance.
What is the Cheapest Type of Life Insurance Policy?
Term life insurance is the cheapest form of life insurance. Unlike whole life insurance, term life offers coverage for a set amount of time, and does not build cash value inside the policy. It is only a death benefit, providing pure protection, not an investment.
What is The Importance of Life Insurance?
Life insurance is a product that should be included in a plan to protect the policyholder and his or her family from financial disaster.
Life insurance is important because the death benefit paid out to a beneficiary of the policy can be used to pay bills and expenses on behalf of the deceased.
Is One Life Insurance Policy Enough Protection?
You need life insurance if your death would hurt anyone financially; such as, a spouse who relies on your income to pay the monthly bills.
For many people, one policy is enough. But for some, two or more make sense. Your needs should drive the number and type of policies you buy.
Why Should I Buy Life Insurance Coverage?
Some Common Reasons You May Need to Purchase Life Insurance:
Life Insurance Quotes
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Disclosure: Compensated Affiliate