Life Insurance: What's Best for Your Family?
Choosing the right kind of life insurance policy may seem like a complicated task. Will you need protection for your family only in the event of your death? Do you want to build cash value? Or do you anticipate using your policy as an estate-planning tool? What you expect your life insurance to do will help you determine the type of policy you should buy.
Term Life Insurance
As its name suggests, term insurance provides coverage for a specific number of years. If you die during the policy's term, your insurance pays a death benefit to the beneficiaries you've named. At the end of the specified term, your coverage ends.
Term insurance appeals to many people because it's generally the least expensive coverage you can buy. However, term life builds no cash valueyou're buying pure insurance protection. Premiums typically start out low, although they generally increase as you grow older.
Before you purchase a term policy, ask your insurance professional for a projection of your costs over the policy's term. Remember that, as you get older, you may not need as much insurance coverage as you do when you're young and providing for children or carrying a mortgage on your home. Be certain any policy you buy is guaranteed renewable and convertible so that a medical exam won't be required each time you renew or if you change to a cash-value policy in the future.
Cash Value Means Just That
Cash value insuranceincluding whole, universal, and variable lifeoffers you protection throughout your lifetime. While in the beginning, cash value insurance is generally more expensive than term, fixed premiums may make it less expensive later on. Over the years, your policy builds cash value, which, along with any earnings, accumulates tax deferred. Moreover, you usually can borrow up to a certain amount of the cash value of your policy.
You may want to consider buying or switching to a cash-value policy if you'll need coverage in your later years when term insurance costs can become prohibitive.
A Survivorship Policy Offers Special Protection
Another type of life insurance that you may want to consider is a second-to-die or survivorship policy. This policy insures two lives rather than one and pays benefits only after the death of the second insured individual. Policy proceeds can help pay estate taxes and settlement costs while leaving other assets available for heirs. A second-to-die policy may cost less than purchasing separate policies on each spouse.
A survivorship policy is often used in conjunction with a family owned business or other illiquid assets. Additionally, couples with special-needs children may want to consider a survivorship policy to fund a child's long-term care and support following the deaths of both parents.
Planning for the future can help ensure your loved ones' personal and financial security and selecting the right life insurance policy is an important step in this process. For over a century, #1 Insurance Quotes Life Disability Insurance has provided insurance protection against financial hazards resulting from premature death or disability. We offer term, whole life, universal life, survivorship life and other products and services to help you meet your individual needs.
Our highly professional representatives, working in concert with your other financial advisors, can be instrumental in helping you plan for the best possible future for your loved ones. Please contact us if you have any questions or are in need of planning assistance.