How to Pick the Right Life Insurance Plan
July 19, 2022
Knowing how to pick the right life insurance plan is essential to feel comfortable for yourself and your family down the line. Life insurance is one of those things that’s often misunderstood, especially by those who haven’t invested in a policy. Unfortunately, it’s also one of the most valuable investments you can make for the long-term financial protection of your family.
Picking the Right Life Insurance Plan
When you start shopping for a life policy, you’ll want to take some time to consider your options carefully. It is essential to ensure you get the right coverage for your unique needs. Here are a few things that you should understand.
Why Are There So Many Types of Life Insurance?
Exploring options for a life policy will reveal many different types of these policies. The other options come with separate terms, features, and considerations. For example:
- Term life — These policies remain in effect, with a fixed premium, for the specified term, whether 10, 20, or more years. The policy pays out the predetermined death benefit if you die during that term. At the end of the term, if the policy hasn’t paid out, you can typically renew for another term, convert it to a whole-life policy or discontinue coverage. Term life doesn’t generate cash value.
- Permanent life — A permanent life insurance policy guarantees you coverage for the entire remaining duration of the rest of your life. Likewise, this works if you continue paying the policy premium. The whole life policy allows a fixed premium for the duration of the policy, though it can vary with a universal life policy. These policies gain cash value at different rates and may even generate enough cash to pay the policy premium and borrow against it. You’ll find various options for these permanent life policies based on the level of investment risk you’re willing to take and the amount of growth you expect from the policy.
What Life Insurance Plan Fits You?
Choosing the right life policy means more than just deciding between term and permanent coverage. You need to think about the death benefit that you need as well. Some policies may limit the death benefit options. Consider the debts you may leave behind and how many years of replacement income you want to provide your family to calculate the needed death benefit.
Also, think about your age and health. Your premiums will go down if you purchase while young. Remember that term life premiums will change at the end of each term, so consider the fluctuation risk.
There’s sure to be a solution that will meet your family’s financial needs regardless of your policy. Consider your goals and the policy options available to you, and you can make an informed choice.
About 1891 Financial Life
At 1891 Financial Life we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.