Peeling Back the Mystery of Life Insurance
Whatever stage of your life you’re in, there’s a type of life insurance that’s right for you.
For anyone thinking of getting life insurance, there’s a wide range of insurance types, and which one will suit your needs depends mostly on … well, you. It all begins with who you are — not your name — but what you do, how old you are, and where you currently are on your life path.
To young people just beginning to figure the world out for themselves, life insurance is probably not at the top of their immediate to-do list. It isn’t exciting, glamorous or engaging. It’s like infrastructure: though not sexy, it can turn out to play a significant role in your life.
The long-term purpose of life insurance has always been to provide for one’s family when you are no longer able to. However, in the interim, it can offer peace of mind that can allow you to function with some sense of security while building your life with your loved ones at your side.
So what kind of life insurance would be right for you? Of course, that is a deeply personal matter and it does require some research. But here’s a general overview of types, focusing on what each one was designed to provide.
The most common types of life insurance are: Term Life Insurance and Whole Life Insurance.
Term Life Insurance
The most affordable is term life insurance. It is usually in force for a designated period of 5, 10 or 20 years, or it is contracted to terminate when the insured person reaches a certain age. Premiums can rise as you age, and if you outlive the policy, that money will not return to you or your loved ones. There is also no borrowing against such a policy.
Whole Life Insurance
The other major life insurance option is known as whole, traditional, permanent, straight, or ordinary life insurance. Whole life insurance is considered a form of cash value insurance. As the name implies, it covers you for the entire period of your life instead of ending at a specific date, hence the higher premiums. But there is a giant upside to this. Whole life insurance is considered a form of equity that you can access during your lifetime. You can borrow against this policy later in life if you need to.
It’s a lifetime guarantee that, as long as you pay your premiums and comply with the policy agreement, this policy will remain with you till the end of your life. And some versions of this policy don’t even require premiums to be paid throughout your whole life, but for a fixed number of years.
Best for single adults on a budget: Term Life Insurance
You’re young, single and lead a busy, active life. It’s a certainty that the main thing on your mind isn’t life insurance. So what can life insurance offer you? If tragedy should strike, some expenses could seriously burden your parents or other loved ones. You might leave behind student loan debts or other bills to which your family would be found liable. The good news is that as a young, healthy person, life insurance would be fairly inexpensive. It may even be included in an employer’s healthcare package if you are employed in a full-time/permanent capacity.
Best for young families: Whole Life Insurance
If you’re young and have a new family of your own, the recommendation is to get whole life insurance. It will stay with you as your family grows, providing peace of mind, presumably for decades to come. Later in life, you may be glad that you got it early.
Best for investing in your child’s future: Whole Life Insurance
The optimum choice for investing in your children’s future would be a whole life insurance policy. Many new parents even enroll their infant in a child insurance policy, which he or she could tap into later in life, perhaps to pay for college or to buy a first home. Starting early is never a mistake, as rates are the lowest and it can potentially be of the greatest benefit for the longest time.
Best for older adults: Guaranteed Issue Life Insurance
If your nest is now empty, you may feel that the whole life insurance policies you and your spouse are still carrying might be unnecessary. Instead, you might consider taking out a guaranteed issue life insurance policy. This would basically pay your end-of-life expenses, and it requires no medical exam.
Know your insurer.
Whatever flavor of policy you choose, it’s important to do your homework on your chosen insurance company. You are setting up a contract to last for many years, so you want to know that your provider has the required staying power. You can research insurance companies through financial rating agencies (such as S&P Global Ratings, Moody’s and the Fitch Group) for any given insurance company’s Financial Strength Rating. A little bit of research upfront can extend that peace of mind you’re working to build long into the future.
Learn more about life insurance and find the policy that is best for you and your family. Contact Skylake of Hollywood, a full-service general lines insurance agency in the State of Florida. The friendly agents at Skylake will help you make informed, sensible and affordable decisions about your life insurance needs.
The SKY is the limit when your dreams are properly INSURED.
