Life insurance is quite effective at providing peace of mind since it provides money your family can fall back on should something happen to you! While the subject of life insurance is one most people don’t often confront, it is a subject that should be discussed, especially if you’re married and/or have small children at home.
Life insurance can also afford you countless opportunities, depending on the type of insurance you select, such as: leaving an inheritance to your children, paying off outstanding debt, replacing your income, going on your dream vacation, or ensuring your final arrangements are covered should something unexpectedly happen.
Life insurance is for you, if:
- You’re married.
- You’re the sole moneymaker.
- You’re a business owner; regardless of formation.
- You’re a stay at home parent.
- You have or are thinking of starting a family.
- You’re caring for relatives who rely on you financially.
- You have significant cosigned debt that could financially burden your co-signer.
- You’re concerned about paying for your own final arrangements – or burdening your loved ones with those costs.
How to Buy Life Insurance?
There are two main types of life insurance available: term and permanent life insurance. Several options exist, however, for the latter including universal, whole, and variable. Term life insurance covers you for a set term, typically 10 to 20 years, and is relatively affordable. When the policy expires, it can usually be renewed for another term, but often at an increased rate depending on your age.
Permanent life insurance on the other hand covers you for your entire life, as long as the premiums are paid, and carries with it a cash value. Over several years of on-time payments, the policy’s cash value amount adds up, earns interest and allows you to take out loans on that interest. However, when compared to term life, the premiums for permanent are much higher. It’s also a bit more convoluted to understand.
Of the two types of life insurance available, term life is easy to understand, and is a great choice for many people. While your employer may offer term life insurance, they often only offer coverage that equates to one to two times your annual income, rather than the recommended seven to ten times your annual income. It’s important to take your personal lifestyle into consideration when purchasing any type of life insurance.
Contact an independent insurance agent to learn more!