In the last 10 years, the number of people buying life insurance has dropped by over 25%. Life insurance is being pushed to the side to make room for other financial choices.
Life insurance 101 tells us that death can happen at any moment, so make the effort to ensure you and your family’s financial safety.
Keep reading to see our top tips for getting life insurance.
Life Insurance 101
Knowing how to get life insurance is the easy part, as most companies are eager to invest in new customers. But, knowing what options are out there for you is where it gets tricky.
- Understand the Different Policies
There are two types of policies you should be aware of; term life policies and whole life policies.
Term Life Policies
These are life insurance contracts that span a specific term of your life. For instance, when you have young children or owe a mortgage. When your death would be the most financially devastating.
With term life policies, it’s a contract you can outlive. Thus it’s only useful if you die during the term. Or else you’ve ended up paying out a lot of money for no purpose.
Whole Life Policies
These are contracts that span the rest of your life. Unless you intend to cash in your policy, you can expect to pay an annual sum every year.
Whole life policies have a fixed death benefit, as well as a cash value that grows over time. You’re also allowed to borrow tax-free from your policy’s cash value.
- Who Benefits From Each Policy?
In the case of a term life policy, these are cheaper plans that benefit those with lower incomes. The money that goes to your family in the event of your passing is tax-free. You can also convert to a whole life policy if you end up deciding that’s better.
For a whole life policy, you pay a higher premium but the contract will not time out and payments will remain the same. Whole life policies work well for those with higher incomes and low savings. The cash value of your policy can double as a forced savings account.
- How Rates Work
Rates and prices are negotiated on an individual basis. This is because risk and life expectancy plays a big role in the rates you will be offered. Age is also a big factor, the earlier in life you apply the cheaper the rates you can expect to pay.
The best thing to do to make sure you’re not overpaying for life insurance is to talk to others with life insurance and talk with different insurers.
Take the time to research plans and see if you qualify for life insurance.
One Life to Make Right
Basic life insurance 101: It’s better to play it safe.
Life insurance isn’t there to make you worry about the worst, it’s there to make sure you and your family will be okay against the worst. And with these tips, you’ll find the right life insurance policy in no time.
We hope this article answered your questions. If you found this interesting, be sure to check out our blog for more information on topics like finance and business – even technology!
