When it comes to life planning, ensuring that your family will be financially secure provides peace of mind. The more we understand how life insurance works, the better we can protect our families when life comes to an end.
If you’re working on creating a lifetime security plan, consider these three things you may not know about life insurance:
Life Insurance Isn’t One-Size-Fits-All
You have options in choosing your life insurance policy. Life insurance policies provide full ranges of coverage in the event of a passing – from funeral expenses to family counseling to uninsured medical bill coverage. So, in the event of a passing, your family can take time to grieve without financial worry.
The two most common choices for life insurance are term life and whole life.
Term life insurance protects a set coverage window. Typically featuring more affordable coverage options, you are covered under this policy type for the specified period so long as premiums are paid. Premiums are set by the insurer based on your age, health, and life expectancy. In some cases, a medical exam may be required before the insurer will issue coverage.
With term life insurance, you decide how to structure your premiums. For example, you might choose a year-to-year option with a premium increase or set a higher initial premium to cover a more extensive period (generally 10-20 years).
After your policy expires, you can choose to renew it, but your new premium will be based on your age and health at the time of renewal.
It is also possible to convert your term life policy into a permanent life policy without needing a medical exam. This is especially useful for those with evolving health conditions and needs.
Whole life insurance offers more than the standard protection of a term life policy. It additionally provides a secure avenue to grow and protect your family’s financial assets. It is a permanent policy that you do not need to renew.
As the name implies, the policy lasts the duration of your life, and your premiums are locked in when you purchase it. The premium rate will not increase as you age or if your health circumstances change. The plan also protects you from the effects of the ever-changing state of the economy.
The benefit of a whole life insurance policy is that it accrues a cash value that the policy owner can tap into at any time. And if the policy continues throughout one’s lifetime, the death benefit is typically larger than its term-life counterpart. The policy, however, tends to come at a higher initial premium.
You Can Invest in a Whole Life Insurance Policy for Your Grandchildren
As a grandparent, you want to do everything in your power to equip your future generations for success. Purchasing a whole life insurance policy for your grandchildren can help build the foundation for financial security for years to come.
Because whole life insurance has a set coverage amount for a life duration, you can guarantee that your grandchildren are paying the same premium amount as when you established the policy. Additionally, as your grandchildren’s financial needs evolve, they’ll have the option to access their policy’s cash value at any time.
Final Expense Life Insurance is an Affordable Way to Give Your Family Peace of Mind
Final expense life insurance is a whole life policy type that also pays funeral and outstanding medical expenses when you die. Often referred to as ‘burial’ or ‘funeral’ insurance, it is a popular choice for older individuals looking to purchase coverage.
Although the policy generally covers funeral costs, the disbursement can be used for various needs, such as covering credit card debt or remaining mortgage payments. The policy’s beneficiary can choose how to utilize the resource best and provide the right type of financial comfort in their time of need.
To find out how you can provide more security to the ones you love, schedule an appointment with a CORE Insurance Advisor or call (877) 404-8060.