I can honestly say I wouldn’t be where I am without life insurance. The insurance policy my dad had in place allowed my mom to remain financially secure and provided my siblings and I with educational opportunities we wouldn’t have otherwise had.
There are two main routes you can take when it comes to life insurance – term life or whole life. Both offer financial protection in case of an untimely death, but there are a few key differences between the two.
Benefits of Term Life Insurance
Term life insurance is temporary coverage purchased for a specific amount of time. Benefits are paid to your beneficiaries only if you die within the period of time for which the policy was written.
Premiums are cheaper the younger and healthier you are, so it’s a good idea to purchase term life while you meet those conditions. Don’t assume that because you’re young and healthy you don’t need it, because once a term life insurance policy expires, you must re-requalify for coverage based on your current age and health conditions.
Benefits of Whole Life Insurance
Whole life insurance premiums are typically more expensive than term life, but your policy gains cash value as you keep paying into it and the premiums are locked in once they’ve been established. With whole life insurance, your money is invested and remains until you die, regardless of when you die. Your beneficiaries are guaranteed a payment and there is no need for coverage renewal. Your policy also accumulates cash value so you can borrow against it.
Another option with whole life is to purchase a policy on a child. The earlier you start the more cash value you can build. You can then withdraw from the cash value to pay for their college or other life expenses.
Setting Your Family Up for Life
There are other types of life insurance that can fit varying circumstances, such as universal life. Ultimately, the goal when it comes to life insurance is to secure your family financially for life without you. Life insurance payouts often don’t last as long as expected, especially if the policy owner is the breadwinner. The money can be used up quickly, so it’s a good idea to get the biggest benefit you can afford.
I’m grateful for my own life experience and the life insurance policy my dad had in place. I’m committed to helping other families ensure they have a better life should they find themselves facing the difficult absence of a parent. Contact me today and see what life insurance options are best for you and your family’s circumstances.
