Life Insurance

You may be taking numerous steps to prepare for the future. For example, you may be saving money regularly in a retirement plan and trying to pay off your mortgage and debts. It is equally important to look farther down the road and to prepare for the end of life. While it is not pleasant to think about your passing, this is an inevitable outcome that you should plan for. Buying life insurance is one of the most common steps that people take to prepare for the end of life.

Common Reasons to Buy Life Insurance

There are many types of life insurance that you may purchase, and all of them offer death benefits. When you set up coverage, you select the benefits amount based on your needs. You may also have control over other features of the policy, such as the policy’s term length. When you pass away, the death benefits are paid to a named beneficiary. One of the primary advantages of life insurance is to financially provide for your loved ones through these benefits. The proceeds may be used to pay for funeral or burial expenses, to pay off major debts, to support dependents for at least a few years after your passing and more. Some types of plans have a cash accrual feature as well. If you set up one of these policies, you may borrow against the cash value in your policy. You may also pull the cash completely out many years from now and use the money for any desired purpose.

Different Types of Life Insurance

If you are preparing to apply for life insurance, understanding the types of plans available and their advantages is critical. Term life insurance is the most common type that most people think about. It has a generally low premium compared to permanent coverage. Term life offers benefits only for the defined term period, and coverage ceases entirely at the end of this period. No cash accrual takes place with term life. Permanent life is offered through whole or universal life policies. These policies have lifetime coverage and a cash accrual feature. There are many variations of these and other types of coverage as well. For example, there are burial expense policies, no medical exam policies and more.

When to Purchase Coverage

If you do not currently have life insurance or if you believe that your coverage does not meet your current needs, buying a new policy as soon as possible is essential. Death may occur at any time regardless of your age or heath status. Many people purchase coverage after getting married or having a baby. They may also purchase coverage before a vacation or a major trip.

How Much Coverage to Buy

There are several factors to consider when you determine what type of coverage to buy and how much to purchase. Your current budget is a critical factor because you need to set up an affordable premium. Term life with a shorter term length is more affordable than a longer term length. Permanent life insurance generally has a higher premium than any term length for term life coverage. Your benefits, your health status, your age and many other factors also come into play. In addition to focusing on your current budget, think ahead about how your loved ones may use the proceeds after your passing. By putting yourself in their shoes, you may be able to strategically determine the right amount of coverage for your needs.

Now is a great time to review your current coverage against your current needs. If you would benefit from the advantages of life insurance, spend time requesting a few quotes today.