Health insurance affordability and mandated coverage are both discussed at length because of the recent implementation of the Affordable Care Act, yet the number of people without personal life insurance goes largely ignored. No one likes to think of their impending death, yet families can be left financially devastated by an untimely passing. Estate taxes can swallow much of a lifetime of accumulated wealth.
The type of life insurance that you need depends upon your personal situation. You may want to protect your family in the event of your unexpected death, ensuring that your mortgage and your children’s education will be paid in full. Alternately, you may be more concerned about a future inheritance for your children, free of inheritance taxes, upon your eventual passing. The two kinds of insurance from which you must choose are term and whole life insurance.
Term Life Insurance
Term life insurance is offered for a set period of time. The number of years in the term will determine your monthly premium, with the shortest terms, such as a five year term, having the lowest premiums. Your premium will be guaranteed not to change during the entire length of the term, but will be more expensive for longer term policies, because your chance of death increases over a longer period of time. Rates are determined by your age, your health, tobacco and alcohol consumption, and your family history.
Term life insurance is preferable for individuals who can’t afford a large monthly premium and are interested in providing security for their family in the event of their passing. Determining the amount of coverage needed is an individual decision, but should be based on paying off the existing mortgage and other bills, and providing for lost income for a minimum of one year.
Whole life Insurance
Whole life insurance is guaranteed to be paid to the beneficiaries, because it is in effect for your entire life. Your premiums will never change from the first payment. Premiums are substantially higher then term insurance, because term insurance often ends before the death of the insured. However, the earlier in life that you begin a whole life policy, the lower the payments will remain throughout your life. Whole life insurance also builds equity from which you can borrow money for large expenses.
Whole life insurance is most beneficial to those with a large estate, who wish their beneficiaries to receive a large inheritance without paying exorbitant estate taxes, and for those who want a guaranteed return on their investment. For more information, contact an insurance company like Davies-Barry Ins.
The type of life insurance that you need depends upon your personal situation. You may want to protect your family in the event of your unexpected death, ensuring that your mortgage and your children’s education will be paid in full. Alternately, you may be more concerned about a future inheritance for your children, free of inheritance taxes, upon your eventual passing. The two kinds of insurance from which you must choose are term and whole life insurance.
Term Life Insurance
Term life insurance is offered for a set period of time. The number of years in the term will determine your monthly premium, with the shortest terms, such as a five year term, having the lowest premiums. Your premium will be guaranteed not to change during the entire length of the term, but will be more expensive for longer term policies, because your chance of death increases over a longer period of time. Rates are determined by your age, your health, tobacco and alcohol consumption, and your family history.
Term life insurance is preferable for individuals who can’t afford a large monthly premium and are interested in providing security for their family in the event of their passing. Determining the amount of coverage needed is an individual decision, but should be based on paying off the existing mortgage and other bills, and providing for lost income for a minimum of one year.
Whole life Insurance
Whole life insurance is guaranteed to be paid to the beneficiaries, because it is in effect for your entire life. Your premiums will never change from the first payment. Premiums are substantially higher then term insurance, because term insurance often ends before the death of the insured. However, the earlier in life that you begin a whole life policy, the lower the payments will remain throughout your life. Whole life insurance also builds equity from which you can borrow money for large expenses.
Whole life insurance is most beneficial to those with a large estate, who wish their beneficiaries to receive a large inheritance without paying exorbitant estate taxes, and for those who want a guaranteed return on their investment. For more information, contact an insurance company like Davies-Barry Ins.
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