There are several life insurance options available to you. You can find the best life insurance for your needs by understanding the options, comparing life insurance rates, and choosing the life insurance plan that is the best for your lifestyle.
Understanding the various options and how they affect you will help you make an informed decision about life insurance. There are four different types of life insurance available to you.
There are two basic types of life insurance – universal and term. Universal life insurance policies pay a base amount, regardless of your age at the time of death. Universal life insurance policies also provide some flexibility in the cash value.
Term life insurance policies are usually purchased for a specific time period, such as ten or twenty years. If you are young and do not yet have dependents, you do not need life insurance options that provide cash values.
If you do not have any dependents, you will need to select a permanent life insurance policy type. You will need to make decisions about the premium cost, coverage amount, the length of time you will pay the premiums, the death benefit amount, and the investment return on the policy.
If you are married and have children, you could use a joint income replacement policy. Joint income replacement policies replace your spouse’s death benefit and the joint income with a lump sum, allowing you and your dependents to receive regular payments. For more specific details on the costs of life insurance for parents, we urge you to read this write-up.
If you are single and do not have children, you may want to consider obtaining no-deposit policies. A no deposit policy would allow you to accumulate cash without the worry of missing out on payments because of death or divorce.
Regardless of your age or location, you will need to select a term policy, which lasts for a stated period of time. Your premium for term life insurance rates is based on the age at death of the insured, the average daily income for the insured, and the number of years you will be required to pay premiums.
If you are young, you can purchase an inexpensive term policy at a younger age and increase the coverage at a later date. If you are older, you can opt for a longer-term coverage plan that allows you to make payments for longer periods of time.
Another type of life insurance that you can consider is universal life insurance. Universal life insurance provides coverage for your family and depends on two variables; your beneficiaries and the number of premium payments that you pay each year.
The two variables are determined by you and your family. Your beneficiaries are those people or other entities that will be financially devastated if you pass away. For example, if you have one spouse, then your beneficiaries would include your spouse and any dependent children.
If you have two or more working spouses, then the beneficiaries would consist of all of your employed spouse or any dependent children that are legally allowed to receive an income. Some people may want to consider investing in a term life insurance policy in order to protect their estate and those who are dependents of their late spouse or parents.
A good place to start is with the value of your current savings account. If your savings account is currently worth less than the number of your monthly premium payments, it may be a good idea to start saving towards a higher amount of coverage.
This way, should you pass away, your dependents will not have to worry about finances if you did not leave anything behind for them. You can always change your coverage options should you ever pass away. However, some policies may not be available after you die and this may be why you choose to purchase a policy in the beginning.
Other life insurance options include variable life insurance contracts, no medical exam life insurance policies, cash surrender policies, and variable universal life (VUL) contracts. These different types of policies provide different coverage at different premiums.
It is important to be aware of the different costs associated with the various types of contracts so that you are sure to pick the right option. For instance, while medical exams are usually required for Variable Universal Life policies, it is not a necessity for the fixed final expense life insurance policies.
Choosing the right type of life insurance coverage is the key to protecting your family and loved ones in case you pass away.