You decide to purchase home and auto insurance policies to fulfill state requirements.  Companies make sure you purchase insurance to protect the general public.  Mortgagees need to protect their investments that is why they need properties insured.  So why would you or I not protect our own MOST VALUABLE investment, in this case, our families?  A way to do so is by providing a form of financial security for them in the event of an untimely death.

Before making a life insurance purchase always consider your financial situation.  Your life insurance can be arranged to assist your family in paying for mortgages and debts.  Other ways to assist your family includes paying for funeral costs, medical bills, pay for college, and borrow against it.  Understand that there are various forms of life insurance such as term and whole life insurance.  In short, term insurance will pay if your death occurs during the term of the policy as determined at inception.  When you purchase whole life insurance it is established to maintain active coverage throughout the life of you the insured.

Term Life

Premiums tend to be lower with term life.  As stated before, your term life insurance is designed to protect your beneficiaries in case of the insured’s premature death.  If this occurs beneficiaries would receive a death benefit but no other policy or monetary value.  Term life policies can have coverage from one year to 30 years with the most common coverage term at 20 years whose premiums more than likely stay the same throughout the term.  No other policy benefits are awarded past the predetermined “term” period.  A good use of a term policy could be if you decide to set it up as family protection plan.  Also you may choose to match years left or amount owed on your financed home to be paid off.

Whole Life Insurance

Whole life provides continuing life coverage and becomes an investment as policy gains cash value.  Your premium will stay the same for as long as the insured lives.  Be assured your death benefit is guaranteed and cash value account on your policy grows.  The cash value on the policy grows, tax-deferred with no pending taxes to be paid as it accumulates, you can borrow against it or cancel policy to receive cash.  Keep in mind that if you borrow against your policy loans must be repaid with interest or death benefit will be reduced significantly as well as coverage will be lost if policy is cancelled.

Term vs. Whole Life Key Differences

  • Term policies have a predetermined coverage span.
  • Whole life policies have a structure that covers for the life of insured.
  • Term Life policies have lower in costs but offer lower overall value.
  • Whole Life policies have higher costs but do offer higher overall value.

Are you still having trouble deciding which life insurance coverage could work for your family? Consider this, term life insurance would make a good choice if you need coverage only for a certain period of time.  Another situation that makes term life the better choice for you is if  you want the most affordable coverage.  Whole life coverage is your choice if you need it for the rest of your life.  Also your best choice if you want to provide money for your beneficiaries or wish to spend your retirement funds.

Always ask what the policy requirements are as they do differ.  If you suffer from certain health conditions do not get discouraged many companies cover preexisting conditions.  As they will not require you to take a medical exam in order to a purchase life insurance coverage.

Have questions you need answered, need clarification or are ready to purchase, contact us for guidance and a free quote.