Life insurance is a very important tool for planning your estate and aiding your family in case of your death.
The best value in life insurance will be the one that offers a low premium with maximum assistance for your beneficiaries. The type of policy you choose will depend on many factors, including your age and the age of your family, your health, and the level of financial hardship your family might face if you were to die.
The three most common types of life insurance policies are Term Life, Whole Life and Universal Life.
Term Life Insurance is purchased for a specific period of time only. Generally, it is the least expensive, but if the term runs out and you have not used the death benefit, the policy expires. Term life insurance pays the face value if you die within the set term, and can be renewable. The policy premiums often get higher as you get older.
Whole Life Insurance is a type of policy that pays face value. no matter when you die. With a whole life insurance policy, a younger person might pay considerably more than they would if they bought a term life insurance policy, but later payments are much more reasonable. You can buy Level Premium Whole Life policies, which require lifetime payment, or Limited-Pay Whole Life policies, with higher payments over a limited number of years.
Universal Life Insurance is a tool that can benefit you while you are living, as well as help your beneficiaries after you die. It acts as both a life insurance policy and savings account. It can be borrowed against and it is flexible so that, as your family’s needs change, you can adjust your policy. The premiums are often lower than that of whole life insurance, but changes in interest rates will affect both the yields and premiums for your policy.
