When determining your need for life insurance, you need to know which policy is right for you.
It is important to understand the biggest differences between term and permanent life insurance when deciding which of these products will best provide you and your family with peace of mind.
Term life insurance is a great way to protect your debt obligations without busting your budget. Term insurance doesn’t generate cash value within the policy, which is why it costs less than other types of life insurance.
Most term policies are designated to expire after a certain number of years of coverage. If the covered person passes away during the coverage period, the death benefit is paid to the beneficiary.
An example would be a woman who has $50,000 in student loans and had her parents cosign on her loans prior to graduation. She might consider term insurance, with her parents as the beneficiaries.
Permanent life insurance is designed for a lifetime of changing insurance needs. Instead of having term coverage that lasts a certain number of years, you can rest easy knowing your permanent policy will never expire and will pay a death benefit to your beneficiary when you pass away. The median funeral cost in 2017 was approximately $7,360.00 (www.nfda.org).
Traditionally with permanent insurance, you pay for the policy’s level premiums until you pass away. Other products allow you to pay their permanent policy in full within a certain length of time, such as a 10- or 20-pay policy. The younger you are when you opt for a permanent life policy the better, because rates will be lower, and it’s vital in protecting your insurability. See our web site for more info on final expenses.
If you understand the differences between term and permanent insurance, you may even decide that it’s better to have both coverage options. A growing family, for example, may need enough death benefit to cover family and living expenses with term insurance, but might also consider an affordable final expense permanent policy for a low death benefit (such as $10,000) to cover funeral costs.
For more information check out life insurance on our web site.
“In the end, it’s not the years in your life that count. It’s the life in your years.” – Abraham Lincoln.
Be prepared for whatever life gives you and ask us about life insurance today.
