Benefits of Life Insurance
Life insurance is something that we hear about constantly, but many people wonder if it’s worth adding this additional expense to your monthly budget. There are many advantages to buying a life insurance policy and it can be used in a variety of situations. For example, a term life policy can be used to protect yourself or your family in the event of your spouse’s death. Or you could purchase a whole life insurance policy to cover the end of life expenses of a loved one. In any case, owing a life insurance policy can provide you with peach of mind knowing your finances are protected if a tragic event occurs. In addition, a life policy can be used for investment objectives. It is possible to produce a growth in income via the regular premium payments. Below is a snapshot of the primary benefits of whole, term, and universal life insurance. This should help you answer the age old question: Do I need life insurance?
Term Life Policies
Term life insurance is the ideal choice for protection. A term life policy will cover a specific period of time. For example, if you and your spouse just bought a home with a 30 year mortgage, you many consider a 30 year term policy. If your spouse dies an accidental death during this period, the insurer will be required to pay the beneficiary. Without a term life policy in place, the mortgage company could easily foreclose on your home and you would have no legal/financial remedy for such a situation.
- Protection from Loss of Income
- Great for New Families
- Protection for your mortgage
- Protection for valuable financed item, i.e. boats, cars, etc.
Read about the full benefits of term life insurance here.
Whole Life Policies
An insurance plan that will provide guaranteed death benefits at a consistent premium is whole life. Whole life policies are often used to cover the end of life expenses of an individual. Funerals and debt settlement can be very expensive, and shows no signs of slowing down. Below are some reasons you might consider whole life insurance.
- Guaranteed Death Benefits
- Fixed Annual Premium Payments
- Internal Rate of Return is similar to other savings programs.
- Cash value of policy is usually guaranteed.
Universal Life Policies
Universal is a hot new type of insurance that can provide greater returns and flexibility, albeit at higher risk to the insured. This makes it possible to adjust the death benefit by paying a higher premium. The ability to adjust the death benefit is directly in response to the inflexibility of whole life policies.
- Guaranteed Minimum Death Benefits
- Death Benefit is flexible based on premium payments
- Potential to earn a greater rate of return
Learn More about Insurance
We hope you learned more about the benefits of life insurance.