Life insurance gives you a way to provide for your loved ones after your demise and to pay for your funeral and other expenses that may accumulate when your life ends. While it may seem morbid to consider purchasing life insurance, it is a smart choice. If you are just beginning to look into life insurance for yourself, consider one of these three major options or one of their derivatives, and choose the best one for you based on your needs.
Term life insurance is one of the simplest insurance products available today and also a highly popular option. It is purchased for a certain number of years, such as 30. Once the term is up, you are no longer insured. However, death benefits will apply if you die within the term. This is a good option if you are the main moneymaker for your family, but do not have the money to put into whole life.
Whole life is even more popular than term life is but can be more expensive. Whole life lasts as long as you are alive and ensures that you receive a death benefit, even if you die past the age of 100. With traditional whole life policies, your premiums and death benefits stay the same throughout the life of the policy.
There are several different options within the whole life category, and of these, the most popular are universal life insurance policies. With universal life, the cash value of the policy varies based on current interest rates. Plus, you can sometimes pay for your policy with its accrued cash value.
A financial consultant can help you choose the best life insurance for your needs. You will need to consider monthly premiums, death benefits and your current age among many other variables. While whole life policies are generally purchased in greater numbers than term policies are, they may not be the best option for you. Be sure to consider carefully before committing to any one type.