There’s a great amount of confusion amongst people that want to get life insurance, but they don’t know which type to get or why to get it.
Life insurance is something that everyone needs. This is not a financial investment, but an investment in the case of an emergency. In this article we are going to, hopefully, elaborate on why you need life insurance and what type of it best suits your needs.
So, without wasting too much of your time, let’s start with the most basic types of life insurance out there.
Term or Permanent
Term and permanent are the two categories that all other types of plans fall in.
The first one, term, is a plan that lasts a set amount of years and protects you in the case of death. When it comes to premiums, all insurances have it differently but this is the type that has a fixed annual premium that doesn’t change.
This premium is calculated based on a number of factors, of which your current state of health and your life expectancy take precedent.
Permanent life insurance, on the other hand, is exactly what it sounds. Most insured people fall into this category, since it lasts for the duration of your life, as opposed to a number of years. Life insurances like the ones you see in www.insuranceandestates.com are some of the good examples where you can clearly see what you are paying for.
This type is also for those that want to get some cash out of it while the duration is still going. As we said, life insurance shouldn’t be about a financial gain but it doesn’t hurt to get something more out of it. If you want to protect your wealth then click here.
Since we’ve briefly touched on these two, let’s go deeper into what other options you have. We will talk about your options based on scenarios in life and present the best options for each scenario.
1. If You Got Married
The first scenario that we will discuss is the scenario of needing insurance after getting married. When in this situation, we would suggest you go for a permanent life insurance plan. Why, well, here are a few reasons.
First off, a general rule is that the older you are the more expensive your plan becomes and the more monthly premiums you pay. This factor’s in that you’re more prone to getting dangerous illnesses and your health will generally go down as you grow older.
However, if you just got married then that means you’re mostly in your 20s or 30s. Since you’re still pretty young at this point, you’ll pay less in premium and will get a more favorable plan in return.
2. If You Just Bought A House
If you happened to buy a house, then you should consider something called a mortgage life insurance.
This is a type of plan that is offered to homeowners, and they mostly call you as opposed to you calling them. But what exactly is this? Well, since buying a home can be very expensive, this plan is designed to help you repay the mortgage on your home in the case of an unexpected death.
The reason why many people choose this type is the fact that it relieves their partner of the burden of having to pay off their mortgage in the case of your unexpected death.
While we’re only touching the surface of each and everyone one of these, you should visit LifeCoverQuotes for more information on all types of life insurances out there.
3. If You’re Expecting a Baby
Having a child on the way is an important event that takes center stage in life. This is exactly why getting life insurance is so important.
If you haven’t been insured yet, and are expecting a child, then you must call an agent and discover what your options are. But what are your options in this specific scenario?
Well, much like the rest of the options, your best bet would be to get a term option for more than eighteen (18) years. We mentioned that term insurance insures you for a number of years, but we didn’t mention that it’s mostly between five (5) and thirty (30).
The minimum you should get is a term plan for eighteen years (18), while you can always go for a maximum of thirty (30). This plan will secure your spouse financially in the case of an unexpected death.
We all know how devastating a loss is, but we don’t usually factor in the burden that the other parent and the child have to go through in such a scenario.
4. If You’re Planning on Retiring
If you happened to be insured prior to your retirement, then chances are that plan is about to run its course, unless if you’re insured permanently.
However, if that’s not the case, then you should consider buying another one. Life insurance will be very, very, expensive at your age due to the number of factors we talked about earlier.
So, in this case, what would your options be?
Well, we’re going to go a little off here and tell you to do something you won’t necessarily expect to read. If you happened to be insured for life, then we suggest you cancel it, release yourself from paying the monthly premiums, repeat the financial rewards and take care of some business.
If you’re free of debt, then you have other ways to invest that money. If you have debt, then we suggest you pay it off.
But what if you’re not insured previously and want to, but are a riskier category? What would your options be?
Some of the options include a universal policy or a whole life policy.
The former is cheaper while the latter allows you a greater length of insurance. This means that your beneficiaries (the people that will be given the money once you’re gone) will be provided with extra money. This will be more than enough to pay off their mortgage, bills, debts, and even put their children through high school.
However, this all depends on multiple factors such as the amount of money you’ll be investing in premiums each month.
It’s not easy to determine the best type of life insurance once you’re retired, so it’s best to talk to a professional to give you a full rundown of the clauses and terms.