Life insurance is an important insurance for everyone to have. Life insurance is an insurance policy that an insured pays a premium for a set length of time and when the insured person passes away the set amount of the life insurance policy is paid to the insured’s beneficiary. Many people purchase life insurance to help their families survive in case of their death. Most everyone needs help in paying for funeral expenses and many times they need help in paying mortgage payments and other expenses. When the main income earner in the household passes away, many times the family is not only heartbroken and devastated but it puts them into a huge financial bind.
Everyone needs to have some type of life insurance plan no matter how young you are. Even if someone young passes away because of an illness or an accident, the family still needs to have the money to pay for their funeral expenses and that person’s final expenses if they have any. The hardest thing for most people to think about is putting life insurance on their child, but even children should be covered by life insurance to help the family with the financial hardships that might happen.
Getting life insurance through your workplace on your family may actually be the cheapest route to go because many times there are still group rates that this can be purchased through. There are many insurance agents, brokers and companies that will gladly sell you an insurance policy. The older you become, the more expensive your premiums are going to be when you take out a policy. There are other factors that will give you an increased premium, such as poor health conditions. Also, if you are a tobacco user, it will cause you to have a higher premium on your policy.
There are many different types of policies for you to consider a few are term life, Universal Life and Whole Life. These all work the same as far as with a contract that you pay a premium for and have beneficiaries set up to receive the amount that you are insured for when your life ends. There are also many differences between these types of insurances. Term life normally offers the cheapest premiums but is only good for a certain term such as 10 or 20 years. After this time frame it can be paid with an additional contract, but normally the premiums are much higher priced.
Universal and Whole policies normally have higher premiums and stay in effect until the insured’s death. The Universal policy is more of a flexible policy that allows you to change your premium amounts and your policy amount to meet your needs throughout your lifetime. The whole life policy is also in effect throughout the life of the insured and is paid out to the beneficiary of the insured. This type is not flexible, and the terms are set on a fixed amount. Another difference with Whole Life is that it has a cash value to it and may accumulate a tax-deferred overtime of the policy.
When selecting the proper type of Insurance for you and your family, make sure to look at all of your options and consider the costs of the premiums. Make sure to include the premium amounts into your budget so that you will always be able to make your payments. Sitting down and having a discussion about your plans, the things that are important to you and your family and what you need from your policy will help you to select the best Life Insurance policy for you and your family.