Welcome back to the month’s discussion on life insurance! Last time we talked about why you should have life insurance. In this blog we’re looking at the next question that follows that customers are always asking: Which type of policy is right for me? The answer is simple. It depends! The best way to figure out which type is for you is to sit down with a licensed seller and go through a “needs analysis.” That’s another topic for another time.
What we want to go through today are the 2 main types of life insurance: Whole Life (or “permanent” or even “perm”) and the other is term.
- Whole life covers you, well, for your whole life or until you cash it in. The premiums remain the same, which makes it a GREAT policy to set up for your children, while the premiums are low and the kids are insurable. With sicknesses and other health problems that are becoming more commonplace in adults, I’d recommend you set up insurance on your kids when they’re young. But the premiums remain the same, you can add more insurance down the road (with a “guaranteed issue rider” or GIR), and, the policy builds a cash value that the insured can use later when need be. For adults, the premiums tend to run higher, but you can use it as the conservative piece of your investment portfolio.
- The other type of insurance is Term. The reason it’s called “term” is because it’s designed for a designated length of time, or term. For instance, you purchase a home with a 30-year loan. Why? What if the breadwinner dies and leaves a hefty mortgage for the significant other? It could spell financial ruin. The answer? Many people will buy a 30-year term policy with a death benefit equal to or higher than the value of the mortgage, so that if he/she would die, the rest of the family isn’t left to struggle or go into economic hardship. Or you buy a car with a 5-year loan. Purchase a 5-year term life policy to cover the loan amount in case something untimely happens.
There are lots of reasons to have life insurance and the type of life insurance product depends upon your needs and intended purpose. I’d love to have a conversation with you about your needs and help you figure out what’s best for you. The main thing is that you have some coverage.
Call me at 720-335-6872 or e-mail me at [email protected] I’d be glad to discuss your needs and the solutions for you. As an independent insurance broker, I can find the best prices and best coverages for you. Until next time…