Are you one of the 40 percent of Americans who don’t have a life insurance policy?
If yes, you might want to start looking into getting one. Of course, not every person requires life insurance, but if you plan to get married and start a family, already married, or have people who depend on you financially, it’s not wise to go about life without being insured.
Life insurance pays out the policyholder’s death benefits to beneficiaries, ensuring they aren’t left in a state of financial despair.
Are you ready to buy life insurance coverage? If yes, you need to know how to find the right policy for your needs.
Know the Different Types of Life Insurance
The first step to choosing the right life insurance policy for your needs is to have a good understanding of the various types of life insurance.
Broadly speaking, there are two types of life insurance: term life insurance and permanent life insurance.
Term life insurance provides coverage for a specific amount of time (hence the word “term”), usually between 10 and 30 years. This is to say, if you have a 15-year term life policy, your beneficiaries will receive your death benefits if you die before the expiry of the term. If you outlive it, it expires. However, some insurers allow policyholders to convert or extend it.
Permanent life insurance provides coverage for the rest of your life. There are different types of permanent life insurance, commonly: whole life insurance, universal life, and variable life.
The biggest difference between term life and permanent life is the latter typically have a savings component in addition to the death benefit. As such, permanent life policies are typically more expensive than term life policies.
Consider Your Financial Situation
There are a number of factors that determine life insurance policies, including your age, health condition, and amount of death benefits. All things considered, though, time life policies have lower premiums than permanent life policies.
As such, if you don’t have a lot of wiggle room in your finances, term life insurance might be more appealing to you. If you don’t like the term limit aspect of term life insurance but can’t afford permanent life insurance at the moment, be sure to find a term life policy that is convertible at the end of the term.
Your Family Situation
You generally need life insurance coverage for as long as you live, but your family situation can affect your coverage needs.
For example, if you’ve got a young family, permanent life insurance would be the best fit because if you were to take term life, it might expire even before your kids leave the nest. However, if you’ve got grown kids who’re financially independent and your age is in the senior zone, term life would be more appropriate because, let’s be frank, the life expectancy in the U.S. is 78.
Regardless of your choice, though, ensure you’re buying from the best companies.
Get the Right Life Insurance Coverage
Life insurance coverage is a must-have if you’ve got dependents. Unless you’re really old (over 65), it’s not too late to get insured. Use this guide to choose the best policy for your needs.
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