How to Choose Life Insurance Best Suited for You
September 9, 2021
September 9, 2021: Few people enjoy thinking about life insurance, but it is wise to plan the financial future of your spouse or family members before your health deteriorates or an accident occurs. Beyond the decision to think about how much you need, it is often difficult to determine what kind of policy to purchase. There are two primary categories to choose from, and there is a difference in both cost and overall value.
Steps for Choosing a Life Insurance Policy
As you begin your search for the right policy, it’s important to pay attention to crucial factors that can impact cost and return on investment. These steps can get you headed in the right direction.
1. Review Your Budget
The policy you choose will need to cover the needs of the beneficiary adequately, but it also needs to fit within your current budget. All of your financial situations should be covered by death benefits, whether it’s outstanding loans on assets, funeral and burial expenses, and cost of living expenses for dependents. By knowing what you can afford to spend, you can make a stronger choice between insurance options.
2. Review Term and Whole Life Insurance
The two most common insurance policies to choose from are term insurance and whole life. In a term policy, death benefits are provided at a more affordable rate, but the coverage is only specified through a particular term. This could be a specific number of years or until an individual reaches a certain age. Once the term is over, the coverage is discontinued. The policy is more expensive, but it provides permanent death benefits distributed upon your death to your beneficiaries. There is also the option to borrow off the cash value while you’re alive.
There can be pros and cons to each option, and it may be best to consider age when you’re picking appropriate life insurance coverage. A term policy, given the affordability of the premium, is a great option for individuals who are raising a family. It provides plenty of financial support should the policy be needed during the course of the term, and it leaves room for funds to be invested in other priorities. However, there is no refund should the policy expire.
For those who are past raising children and looking toward security for the loved ones who will outlive them, a whole life policy provides permanent support. These policies often have a guaranteed return rate, which increases the cash value of the policy over time.
Invest Wisely
When considering the best policy for your situation, always start by looking at what you can afford and what will be needed down the road. Regardless of your choice, providing death benefits for your loved ones is an important investment to make.
About 1891 Financial Life
At1891 Financial Life, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.
Our portfolio is extensive, ranging from various life insurance policies to our new MYGA to support your financial needs no matter what stage of life you’re in. For more information, contact us at (855) 804-7424.