“Health is wealth” – this proverb is true when it comes to choosing the best life insurance for you. Life insurance is one of the most expensive purchases you’ll ever make. So, it’s important to understand how to find out which type of life insurance is best for you. After thinking about what makes for a healthy life. It is a must to go in search of the life insurance which is best suited for us.
The thing about life insurance is not it is one size fits all. We all have different requirements and financial statuses. These requirements keep on changing with time and different stages of life. So, the better question is how to choose the best life insurance? It depends on your financial protection needs. Also, if it is giving financial security to dependents in the event of their death. In summary, all the terms and conditions are being attached to the insurance. Choose a plan that makes you feel secure.
Common types of Life Insurance
Term Life Insurance
In this type of policy, the family gets a payout if you die within specified coverage of term. They could use this money to cover the funeral expenses and any outstanding debts. It is affordable than the other. This term policy may cover for five or ten or twenty years. This policy may end when reached up to a certain age. But, if you outlive the policy, then you are never getting your money back. Neither your loved ones will get the coverage.
Whole Life Insurance
In this type of policy, whole life insurance provides insurance for your entire life. This means it doesn’t have a specific term of ends. Moreover, the higher premium benefits accumulate monetary value. This may get used to paying for the insurance in the future and borrowed against if necessary. The best part of this policy is that you can’t outlive this policy. Until you pay the premium and abide by the policy agreements.
Types of Life Insurance Policy According to Life Stages
For single on a life budget: Term Life Insurance
When you are single and young, you are in dilemma often that whether you should buy life insurance or not? But, life is unexpected and anything can happen at any moment. Taking up life insurance does not mean that it has to benefit the dependents only. It can cover up the expenses that need for your funeral. Also, if you have a student loan, and you passed away, and you do not have an insurance policy. Then it would be a problem for your parents as they have to pay for your debt while they are grieving.
Best for a young family: Whole Life Insurance
This kind of policy is best suited for you if you start having your own family. As discussed before, it provides coverage to you and your dependents. It is expensive than term life insurance. But it has more extended coverage as long as you are paying for the premium on time. Also, if you are following the policy agreements.
Best for your child’s future: Whole life insurance
When you have started to grow your family. The next thought that comes into your mind is to have your kid future bright. We live in a world where college expenses are rising day by day. Your child will be thankful to you if he has no worry to pursue his education. It often happens that something happens which lead to a financial emergency. Also, your youngster might use the insurance coverage to cover the cost of a down payment on a first house. You will never need to use the death benefit. This type of policy cover right from starting their family to even providing them with a stable life.
Best for older adults: Guaranteed issue life insurance
If your children have long ago left the nest, you may not see the need to buy a costly life insurance policy. Yet, it is worthwhile to consider purchasing modest insurance. It helps to assist your family in paying for your funeral expenditures. If you’re afraid that your age or health may cause you to get denied coverage. You might seek a “guaranteed issue” life insurance policy that doesn’t need a medical exam. In this, you will not get denied a guaranteed issue of life insurance coverage because of your age or bad health. Unfortunately, the rates for this insurance tend to be higher. Making them the last alternative for many people.
Other types of life Insurance to think over
- Variable life insurance offers a death benefit. That links to the performance of certain investment assets. The death benefit’s value changes based on the performance of those assets. This might result in a bigger or smaller payout.
- Universal life insurance offers flexibility. Then, a universal life insurance policy is the way to go. You can change the number of your premium instalments. Or even skip some payments with this sort of coverage. The death benefit is also changeable. Also, you may build up cash value by paying premiums and earning interest.
We understand that life insurance is not for everyone. If your loved ones or relatives rely on your income or are responsible for repaying your obligations. It’s worth thinking about getting term life insurance. Whether whole life insurance is a suitable investment is debatable. You should discuss it with your financial adviser and an insurance specialist.