Purchasing a life insurance policy is a major milestone in life. It means you’re making the effort to protect your family’s financial future. But with so many policies available, including different types of life insurance, you need to carefully consider your options.
Life insurance is a contract between you and an insurance company. You pay monthly premiums to maintain the plan, which ensures that your beneficiaries receive money in the case of your death. Life insurance comes in two types with unique benefits and guidelines.
Two Types of Life Insurance
There are two major types of life insurance: term and whole life.
Term Life Insurance
This is a basic form of life insurance, and the most popular. It only pays out if the buyer’s death occurs during the term coverage, which can extend from one to thirty years. Of term life, there are two subtypes:
- Term: It pays only if death occurs during the term of the policy, which is usually from one to 30 years.
- Decreasing Term: The death benefit drops, usually in one-year increments, over the course of the policy’s term.
Whole Life Insurance
Also known as “Permanent Life,” this policy pays the death benefit whenever you die. From the time you sign up, you pay monthly premiums to ensure coverage until your passing. Of whole life, there are three subtypes:
- Whole Life: You pay a fixed premium amount that contributes to the policy’s value.
- Universal Life: You can change the amount you pay in premiums to fund the policy’s value.
- Variable Life: You can dedicate some of the payout to a mutual fund or bonds.
There are several options available to you as you shop for life insurance policies. But how do you know which one you’ll need?
10 Tips to Help Purchase Life Insurance
Just because a policy sounds good doesn’t necessarily mean that it’s a good match for you. Take these 10 tips into consideration when you plan on buying a life insurance policy:
- Know your insurance needs.
- Determine how much coverage you’ll need.
- Assess your current life insurance policy, if you have one.
- Compare the different types of insurance policies.
- Be sure you can afford the premium.
- Determine whether your current life insurance policy is good, if you have one.
- Familiarize yourself with renewal policies.
- Read the fine print on your policy carefully.
- Reevaluate your life insurance program every few years.
- Have an insurance representative help you choose the right policy.
We don’t want you to have to go through this life-changing decision alone. Let the licensed representatives at HealthMarkets help you find the perfect life insurance policy for you. We can find policies that fit your unique situation without breaking budget.
Give us a call today at (800) 917-4169!