Most people want to know their families will have a secure financial future.
When you start planning for how you’ll care for your family years from now, it’s likely that you will consider a variety of options.
Life insurance should be among the possibilities you study.
Life insurance protects your assets and offers you a chance to help keep your family in a comfortable lifestyle after you’re gone, or even assist a grandchild with paying for a college education. Depending on the life insurance you choose, you could even draw cash from the policy in the event of an emergency or a promising opportunity.
There are two basic types of life insurance: term life and whole life. People value the two for different reasons, and they offer diverse benefits. Here’s a little more about the differences.
Term Life Insurance
Term life insurance is life insurance for a set amount of time, or term (10, 20 or 30 years). If you die before this time is up, your beneficiaries will be paid the face value of your policy. This investment option comes at a lower premium cost because the cash value of the policy does not increase with time, and is often more in tune with a person’s budgetary restrictions.
Whole Life Insurance
A whole life policy lasts for as long as you live. Your beneficiaries will receive a payout equivalent to the value of the policy you purchased, plus interest and other cash-deferred amounts. Life insurance rates are more expensive for whole life policies, but the returns can be much greater if you have the time and financial resources to devote to building this resource. You can also use the savings you build here for other purposes if you choose, and while you are still alive.
What should you choose?
The right form of life insurance depends on your needs and goals for your future. Those with money available to spend might benefit from a whole life policy and the effects it can have on their estate planning. Term life policies are a little more flexible if your budget changes, or if you have other changes you encounter with the passing of time. These best rated life insurance companies can help make your decision a little easier.
Ultimately, you may find that a financial advisor or other professional will be best suited to help you choose the right policy to help fulfill your goals. A trained individual will know how to look at your needs, assets, and other factors to appropriately counsel you as you map out your future.