Whether you are new to purchasing life insurance, confused by your options, or just not a fan of the topic, a life insurance policy is deserving of consideration in every household, and an absolute must for some. When armed with the proper information, the decision-making process becomes a little easier and you can rest easy knowing you’ve made the right choice for you and your family.
Why Life Insurance?
The goal of life insurance is to provide a measure of financial security for your family after you die. So, before purchasing a life insurance policy, consider your financial situation and the standard of living you want to maintain for your dependants or survivors.
Types of Life Insurance
- Term: The simplest, least expensive, and the most widely applicable. With term life, a life insurance company bases the policy premium on the probability that the insured will die within a stated term - typically 10, 20, or 30 years. The premiums are guaranteed for the length of the term, after which you can choose to continue coverage, or decide to let it lapse.
- Universal: A type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance), which is invested to provide a cash value build-up. The death benefit savings component and premiums can be reviewed and altered as a policyholder's circumstances change. Unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his accumulated savings to help pay premiums over time.
- Whole: A contract with premiums that includes insurance and investment components. The insurance component pays a predetermined amount when the insured individual dies. The investment component builds an accumulated cash value the insured individual can borrow against or withdraw.
Cost Associated with Life Insurance
Most people are pleasantly surprised when they see the relatively low premiums of a simple term policy. Of course, a smoker or someone with health problems will likely pay more (or simply be declined for coverage).
Talking about life insurance isn’t always a popular discussion because most people don’t like talking about death. But open and honest discussions about planning for an unexpected death can be surprisingly life-giving. And chances are purchasing life insurance is still an important part of your long-term and comprehensive financial plan.
If you live in the Covington, Abita, Mandeville, St Tammany or surrounding areas and want to learn more about car, homeowners, and life insurance, visit the website of Melissa Baxter-Penzato, Allstate Insurance Agent, or call (985) 875-7707.
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