What is Life Insurance?
Life insurance is a contract between an insurance provider and a policyholder that provides financial security to the policyholder’s beneficiaries in the event of their death. It is a valuable tool to protect the financial security of the people you love and can be divided into two main categories: term insurance and permanent insurance.
Term Life Insurance
Term life insurance provides coverage for a specific period of time, such as 10, 20, or 65 years, and is typically less expensive than permanent life insurance. One benefit of term insurance is the ability to convert some or all of the coverage to permanent coverage at a later date with no additional medicals. This allows you to purchase a significant amount of life insurance when you are young and then convert it to permanent coverage, at some point in the future, no matter your health.
Term 10 coverage is ideal for families and young couples as it offers the lowest premiums for life insurance for the first 10 years. The policy renews automatically with premiums increasing every 10 years. Term 20 coverage is ideal for mortgage and longer-term commitments and offers the lowest premiums for life insurance for the first 20 years. The policy renews automatically with premiums increasing every 20 years. Term 65 coverage provides long-term coverage, and premiums remain unchanged until the age of 65. It is ideal for longer-term commitments.
Permanent Life Insurance
Permanent life insurance, on the other hand, offers permanent protection for you and your family and can meet your investment needs. It can be purchased in three different ways: Term 100, Universal Life Insurance, and Whole Life Insurance.
Term 100 can be purchased for the duration of your life and has no investment component. Universal Life Insurance provides coverage that never expires and has an optional tax-advantaged investment component that can be used to provide an additional source of income in later years. Premiums can be paid for life or for a limited period, such as 15 years. Whole Life Insurance provides permanent coverage that has an increasing death benefit and cash values over time. It complements your retirement strategy as you are able to access cash values on a tax-advantaged basis and allows you to pay premiums for a limited time while actively working in your career.
Why Do I Need Life Insurance?
Why do you need life insurance? The answer to this question is simple: to provide financial security to your loved ones in the event of your death. Life insurance can help pay for final expenses, such as funeral costs, outstanding debts, and estate taxes, and can also provide a source of income for your family. It is especially important if you have dependents who rely on your income to maintain their standard of living.
In conclusion, life insurance is an excellent way to protect the financial security of your loved ones. Term insurance and permanent insurance both offer unique benefits, and it is important to understand your options to choose the right policy for your needs. Contact us to discuss your options and determine the best policy for you and your family.
