If you’ve thought about getting life insurance but don’t know where to start, you’ve come to the right place. In the U.S., 52% of the people surveyed think they can’t afford life insurance. That means their loved ones could get left with hefty funeral expenses.
A life insurance policy can give you and your family peace of mind for the future. Our guide will walk you through the basics of a life insurance policy. Keep reading to learn how to decide what you need and what it may cover.
What Is Life Insurance?
Life insurance is a contract you sign that is between you and the insurance company. It guarantees a specific amount of money that will get paid out upon your death.
A life insurance policy lets you choose your beneficiary. That is the person who will receive the money agreed upon in the contract. It is a legal agreement between you and the company and requires premiums to get paid to keep the policy in force.
Whole Life Insurance
Whole life insurance gives you coverage for your entire life. It doesn’t expire at a certain age. With this type of insurance policy, you build up money besides the regular amount of coverage.
Some people think of these as savings plans because they can draw money out if they need it. They add cash value over the years, and that gets paid out along with the agreed-upon policy amount. When getting life insurance quotes, this may get referred to as traditional insurance.
Some people choose a whole life insurance policy because they don’t have to renew it. They also enjoy the tax-deferred interest.
Term Life Insurance
Term life insurance is an insurance policy that gives you coverage until you reach a certain age. If you should die within that timeframe, your beneficiary will get the money from the policy.
The benefit to term life insurance is that it can cost less than whole life insurance. Paradigm Life offers policies for different budgets, which appeal to people watching expenses.
Once the policy timeframe is up, you will have the option to renew the insurance policy. Sometimes that will come at a different rate. A term life insurance policy has no savings component, so the amount agreed to in the contract is the cash value.
Getting Life Insurance Quotes
Some companies will make you get a physical before they agree to insure you. They need to know your health status before deciding on the amount of life insurance you can get. At the least, you’ll fill out a form about your health and employment status.
For some pre-existing conditions, you may find that you cannot get a life insurance policy. If you’re healthy, you should have no trouble getting life insurance quotes.
The Best Insurance Policy
Now that you know the basics of life insurance, choosing what is best for you depends on what you want at the time. You can get the type of insurance policy that suits your needs.
Don’t get locked down to any one type of insurance. As your needs change, your coverage can change with them. If you enjoyed this article, check out the rest of our site for more business and lifestyle content!
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