When the decision is made to purchase life insurance, and the search begins to find the right policy, many are focused on simply finding the right price. They do not realize that life insurance coverage is not all the same for everyone, and different policies will offer various types of coverage. In order to get the perfect policy, it is important to understand some fundamental elements of life insurance.
First of all, there are different policy terms that offer defined beginning and ending dates of coverage. These are called term life policies, and their benefits will end when the term ends unless the insured elects to extend coverage. In order for the insurance to pay a death benefit, the insured must pass during the covered term. For most policies, the premium will stay the same throughout the term. For example, if a 20 year term is chosen, the premium will stay the same each year until the policy ends. If the insured chooses to keep the policy, they will pay a higher annual premium. Term policies also offer a set coverage amount. Term policies can be purchased at almost any benefit increment from as little as $10,000 to benefits that pay in the millions. An advantage of a term policy is the premium is usually cheaper because it is for a defined period of time.
A whole life policy pays a death benefit as long as the policy is paid and in-force. It is not limited to time increments like a term life policy. Most policies that are commonly referred to as burial policies are whole life policies. The greatest advantage to this type of life insurance coverage is that the insured is covered for their whole life. The greatest disadvantage is the premiums tend to be higher compared to term policies for the same coverage.
There are life insurance policies that offer benefit riders that can be utilized before the insured passes away. For example, you can include riders that will pay for skilled nursing care or for someone to come into the home if the insured is diagnosed with a chronic or terminal illness.
Choosing the right life insurance coverage mainly depends on the family’s current financial needs. If there is a mortgage, college tuition and other major obligations, a family would require more insurance should the unthinkable happen. We can help you get just the right affordable life insurance policy to protect your family now and in the future. Call us today for a free consultation and quote.
