Families need to have preparation made for a secure financial future in the event that the main breadwinner should die unexpectedly. Life insurance is one of the best ways to meet this need and it also comes with many possible options for a greater degree of flexibility.
Life Insurance Can Provide for Your Financial Needs
Keeping your family out of debt in the event of your death can be prevented with life insurance. You can obtain enough coverage to pay for your mortgage, any credit card debt, pay your bills, and provide them with the money needed to enable them to keep on living at their current comfort level. Things like property taxes, funeral costs, medical expenses, and estate taxes can also be provided for in a life insurance policy.
Two Types of Life Insurance
There are only two main kinds of life insurance, so you will want to have a good idea of why you want to buy it before you purchase it. Term life insurance is the less expensive, and it is pure insurance – no frills attached. This kind of insurance provides level protection (face value) for a pre-determined number of years, which ranges from five to thirty years.
The other kind of life insurance is whole life, which is also known as permanent life. This type of insurance policy has a built in “cash value” which builds over time. The available cash may be borrowed once a significant amount has accumulated. The considerably higher price enables money to go toward fees, the agent’s commission, and savings (the cash value).
Long Term or Current Needs
Term life insurance provides you with a low cost life insurance that can easily meet your needs while your bills are higher. Because of the low cost, it is ideal for those who want coverage and be able to invest in interest-bearing accounts elsewhere. At the end of the term, a term life insurance policy can be converted to whole life if desired, or a new term insurance policy can be purchased if you are still around 50. After that, term life insurance starts getting rather expensive.
If you feel you cannot save any other way, then perhaps a whole life insurance policy may be the way to go. However, it will give you much less face value for the same amount of money, and minimum interest in your cash value. Universal life and variable life will give you more options, but are also more costly. At the end of the policy, which is often at 100, you can receive the face amount of the policy.
You should also be aware that you would not ever collect the face value plus the cash value in a standard whole life insurance policy. If you die, your beneficiaries will only receive the face value, no matter how much cash value has been built up.
Life Insurance Can Also Prepare Loved Ones for the Future
The good thing about life insurance is that you can choose how much you want to buy and where it should go. This enables you to think about the future for your loved ones, too. You can help them pay for college, get them started in business, ensure continued medical care if they should need it, or even provide them with some inheritance money, too. Of course, it is also possible that it may not be needed at all.
Getting started is easy. Simply go online and find a life insurance calculator to determine how much you will need. Then get several life insurance quotes – term insurance quotes or whole life insurance quotes – depending on which one you want.