If something were to happen to you today, is your family protected? Will your spouse be able to continue paying the mortgage and the car payment? Will your children’s needs be provided for?
If you have the right life insurance policy, the answer to these questions will be yes, and you and your family can rest easy, knowing they won’t be left with a double tragedy. Do you know the right life insurance for you?
Life insurance is not a one-size-fits-all policy. It is available in a number of different formats and choosing the right life insurance for your needs can make all the difference.
There are two main categories of life insurance: term and permanent, which is sometimes referred to as whole. There are some distinct differences between these two categories and within those two categories there are several different options. Do you know which is the right life insurance for your situation?
Today’s post explains the most common types of life insurance coverage available.
Types of Life Insurance
1. Term life insurance
Term life insurance has a specified coverage period (term), but can usually be renewed or converted into a permanent policy at the end of the term. Premiums are generally affordable initially, but can increase substantially when renewed.
2. Whole life insurance
Whole life insurance is a type of permanent insurance that offers life-long coverage combined with a cash-value savings component. This type of policy has higher premiums than term life. Premiums remain constant throughout the policy and a portion is invested by the company, which becomes the cash value of the policy. Whole life insurance pays a fixed amount upon death.
3. Universal life insurance
Universal life insurance is another type of permanent insurance policy that combines term insurance with the ability to earn interest on the cash value, paying a market rate of return. Cash value grows tax-deferred, and can be withdrawn or borrowed from the policy. It is more flexible than whole life insurance as it also allows you to change your premium payments and death benefit, within limits.
4. Variable life insurance
Variable life insurance is similar to universal life insurance in terms of flexibility and an investment aspect. However, instead of simply earning interest on the accumulated cash value, policy owners have more control over how to invest that cash. The ability to invest in professionally managed investment options allows for the potential to accumulate cash value while providing death benefits protection. However, there is greater risk for loss due to this benefit.
Employers can offer a term policy, permanent coverage or both. Cost-sharing also varies, as some employers cover the full cost, while some require employees to pay the full premium (or a portion of it).
Rates for life insurance policies will vary. Women typically pay less than men, due to their longer life expectancy, and rates increase with age. Also, smokers pay more than nonsmokers.
For a better idea of the rates you can expect to pay for life insurance, and to help you determine which is the right life insurance for your needs, call Roper Insurance today at 303-721-1145 or email us at [email protected]. We are happy to help you find the right life insurance and protect your loved ones today.