Are you wondering what is the best life insurance to get?
If so, you may first want to learn about the two basic types of life insurance and how they work.
The two types of life insurance are Permanent and Term.
Permanent life insurance provides lifetime protection, builds cash value over time inside the policy from which you may take a loan, and the rate is guaranteed to remain the same throughout the life of policy.
Term life insurance is temporary coverage for a set period of time. Terms of coverage may last for a term of 10, 15, 20, 25 or 30 years. Term life is pure protection – there is no cash value or investment feature, you pay solely for the pure life insurance protection. Term life costs a lot less than permanent coverage.
What type of life insurance is right for me?
That depends on your particular needs. What is it you want your life insurance policy to accomplish?
Top reasons why people buy life insurance:
Both permanent and term life insurance can accomplish these goals, and more. The proceeds from life insurance may be used for any reason. The money is left to the beneficiary, and the beneficiary chooses how to use the funds.
The beneficiary is the person (persons) you choose to receive the death benefit from your life insurance policy when you pass away. The proceeds from life insurance are usually paid out to the beneficiary free from federal income tax.
If you have short-term needs for life insurance of 30 years or less, then a level term life insurance may accomplish your goals.
Level term life insurance has level premiums and a level death benefit.
Example: $250 annual premium for $250,000 10-year level term policy
In this example you would pay $250 each year for a period of 10 years and you would have $250,000 of life insurance coverage.
If you pass away during the 10-year term, the death benefit of $250,000 would be paid to your beneficiary, subject to any exclusions in your policy.
If you outlived the 10 year term, your life insurance coverage would expire.
You may want to consider the renewable option, which allows you to renew your term life policy for another 10 year term when it expires, but your renewal rate would be based on your age at that time. With renewable term life coverage you do not have to take a medical exam when renewing the policy, your health will not impact your ability to renew the policy.
If you have longer-term needs of more than 30 years, you may want to consider a permanent life insurance plan.
In addition, many people choose to buy a permanent life insurance policy for their lifetime needs, and a larger term life insurance policy for their shorter term needs, especially if they are on a budget.
How can I compare life insurance rates?
It’s quick and easy to compare life insurance rates online:
What are life insurance quotes?
They are an estimate of the cost of your life insurance policy.
Your life insurance quotes will provide you with the following:
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