As of 2020, 54% of Americans had some type of life insurance coverage. Are you among the 46% that doesn’t?
It’s understandable if you feel confused about life insurance as an investment. Is it really necessary, or is it just another needless expense?
The truth is that life insurance is the best way to protect your loved ones should something unexpected happen to you. Far from being just “another bill,” life insurance is an investment in your family’s future.
Which type of life insurance makes the most sense for your needs? Let’s consider the three most common types.
Term Life Insurance
The most affordable type of life insurance is term life insurance. As the name suggests, you sign up for a policy that lasts for a specific “term,” or length of time. This could be anywhere from 1-30 years, although 10-year policies are the most common.
During the term, the policyholder pays the monthly or annual premium for insurance coverage. If they die during the term, the policy pays out a death benefit to the beneficiaries.
Most term policies are level, meaning the payments remain the same throughout the term. Renewable term policies are updated each year, meaning the premiums can fluctuate with each renewal. Ideally, the best term life policies strike a balance between affordability and financial security.
Whole Life Insurance
Unlike term policies, whole life insurance policies are considered permanent. There’s no set end date, and the death benefit payout is guaranteed as long as you keep up with the premium payments.
Although these types of policies are (understandably) more expensive, there’s a lot of value tied in too. For one thing, premiums remain level for the duration of the policy, meaning you won’t pay more as you grow older or your health declines.
If you sign up for whole life insurance while you’re young and healthy, you’ll pay the same amount into your 70s, 80s, or beyond.
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Military Life Insurance
Active duty military members and veterans can take advantage of government-sponsored military life insurance. These come with standard death benefits and disability benefits, but they don’t offer other perks such as cash value or tax breaks.
For this reason, many current and former military members choose to make the switch to a whole life term. Paradigm Life can easily help you convert your military life insurance policy to whole life insurance. This means you can enjoy the added security (and the extra perks) of a whole life insurance policy.
Which Type of Life Insurance Is Right for You?
When it comes to your family, you can never take too many precautions. Should the worst happen to you, a life insurance policy ensures that your loved ones have the resources they need.
Bookmark this guide and refer back to it as you choose the best type of life insurance for your family’s needs.
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