Many of us face the question of “do I need to buy life insurance”? For those of you that are young and healthy, that is the last thing you would consider. But as a young person, that’s the best time to buy when you are young and healthy because life insurance requires that you are healthy to receive the best rate. The most important factor about buying life insurance is that the rate you pay when you started the life policy is the same rate you pay for the term of your policy. In other words, if you were 25 years old, and bought a term life policy for 30 years, your rate will be the same rate from 25 through 55 when it ends.
Before you buy any individual life insurance policies, you just need to understand that generally life insurance policies fall into two (2) categories:
1. Term Life
Term insurance is designed to meet temporary needs. It provides protection for a specific period of time (the "term") and generally pays a benefit only if you die during the term. This type of insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide that you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.
2. Whole (Permanent) Life
Whole Life insurance provides lifelong protection. As long as you pay the premiums, and no loans, withdrawals or surrenders are taken, the full face amount will be paid. Because it is designed to last a lifetime, permanent life insurance accumulates cash value and is priced for you to keep over a long period of time. Additionally, there are new permanent life policies available in the current marketplace to also provide benefits when you are critically ill, or if you need to take a portion of your cash out of the policy without surrendering the policy.
It's not possible to say which type of life insurance is better because the kind of coverage that's right for you depends on your unique circumstances and financial goals. That is why it is important for you to meet face-to-face with a professional to discuss and determine what best meets your needs and budget. Please contact us for an appointment.