If there’s one, simple fact we can all agree on, it’s this: Life is complicated. And unfortunately, life insurance can be just as complicated at times. A lot of people assume there are only two kinds of life insurance, but there are actually many kinds you can get that fit your personal needs.
Term Life: This is considered the most basic form of life insurance since it simply offers a pure death benefit without any cash value build up. These policies cover a specific length of time and are often very affordable, especially for people who are young and in good health. Typically, the premiums for level term life policies remain the same throughout the time the policy is active.
Decreasing and Increasing Term Life: In decreasing term life policies, the death benefit goes down over time, with the policy ultimately ending when the death benefit reaches zero. These policies can be used to cover an unpaid mortgage — as the mortgage decreases, so does the policy. The latter policy increases the death benefit over time and may be considered by a young parent to cover his or her needs.
Permanent Life: This policy offers death benefit protection as well as a cash value component. It differs from term life in that there is no time limit and is intended to last for the remainder of the insured person’s life — as long as the premium is paid.
Whole Life: In this policy, the premium amount is set and will remain the same for the entirety of the policy. The amount in the cash value component can grow on a tax-deferred basis, allowing it to increase a lot over time. Whole life policies are good options for those who want to stick to a budget since they can buy the policy young and not have to worry about the premiums getting higher as they age.
Universal Life: This policy is like a whole life policy, but it has more flexibility, allowing the policyholder to decide how much of the premium will go towards the death benefit and how much will go toward the cash value — within certain guidelines.
Variable Life: These policies offer a death benefit as well as a cash value, but variable life policies allow policyholders to participate in different investment options. This means that the policy can grow much more over time, but it also adds more risk when it comes to the ups and downs of the market.
Everyone has different life insurance needs, and speaking to a financial advisor can help you determine yours. At American Investment Planners LLC, we make it a priority to help you prepare for the best financial future possible. From life insurance policies to retirement planning, we’re here to help with anything you may need. To schedule an appointment with one of our advisors, please call (516) 932-5130 or email info@americaninvestmentplanners.com.
No comments:
Post a Comment