The Types of Life Insurance: A Quick Guide
Funerals today, from embalming to viewing and burial, can cost grieving families upwards of several thousand dollars. Many people don’t want to think about it, but a funeral can cause financial strain for families on top of the emotional pain of losing someone. One way to ease that burden for your family is to invest in a life insurance policy.
If you’re thinking about buying life insurance, you need to be informed about your options. Here’s everything you need to know about the most common types of life insurance today!
Term Life Insurance
Term life insurance is one of the most affordable life insurance options, and you can buy one in lengths from one year to several decades. Coverage amounts vary, so you can personalize this plan for your exact needs. For most people, this option is enough to secure the peace of mind they need about final expenses.
Outliving your life insurance is something to celebrate. Still, remember that if your term ends without renewing, then your beneficiaries don’t get anything.
Whole Life Insurance
This life insurance type is permanent; as long as you make the payments, it won’t expire. Another benefit is that it is a cash value life insurance. This means that you can borrow from the payout while you’re still alive.
This type of insurance is often the most expensive option. But, once you are enrolled, you don’t have to think about it again. The premiums and the payout are both guaranteed for the length of the policy.
Universal Life Insurance
Universal life insurance is a lot like whole life insurance, but it’s adjustable over time. You can change both the premium costs and the death benefit to fit what you can afford. The policy is permanent and has cash value as well.
This is the best life insurance if you value flexibility, or predict that your financial circumstances could change. Keep in mind that there are specific policy limitations; paying lower rates earlier on could require you to pay more later.
Variable Life Insurance
Variable life insurance works by investing in stocks and bonds. Some options will be guaranteed independent of the market, but universal variable plans, while adjustable, are risky.
You stand to gain a lot from this plan, especially because you can make withdrawals and borrow against it. However, you may have to invest time in managing it, and there are administrative fees as well.
Keep Learning About Types of Life Insurance
Peace of mind and reducing the burdens for your family are excellent reasons to consider buying life insurance. There are plenty of types of life insurance available, so consider your options and find the policy that’s right for you! Your family will thank you for looking ahead and taking care of them to the end.
There’s more to learn about life insurance and other interesting topics! Explore the businesses and finances page of this site today to find more helpful articles like this one.