When it comes to paying your rent or mortgage, buying food and paying your utilities or buying life insurance, are you likely to think of the future rather than the “right now?” A good policy may mean the difference between keeping your standard of living or losing it when a breadwinner dies.
Why You Need Life Insurance
If you are married, do both you and your spouse work? If you work and your spouse stays at home, they, along with your children, rely totally on your income. Maybe an elderly parent or relative lives with you. If you lose your life, your family members would lose you–and the standard of living you now hold.
Life insurance protects, not only your bank account and any investments you may hold. If you’re thinking that you can’t afford insurance, start small. At the beginning, buy a term policy. These are highly affordable, especially if you’re still young and at the beginning of your career. As your income goes up, you can buy a whole life insurance policy.
What to Look for in a Good Life Insurance Policy
As you talk with an insurance agent, look for these features:
º Focused, inexpensive term policy–this insures just your life. For its price, you’ll get basic coverage that fits your current needs.
º Customizable–These policies are based only on the length of the term policy, your health and how much coverage you’re seeking.
As you shop around, remember to give yourself the flexibility you need.
Differences Between Term and Whole Life Insurance
Term and whole life policies have several differences, which include:
º Their longevity. Term policies are in force only for a set time period. Because they are temporary, the premium begins to increase year after year. Whole life premiums stay the same year after year. If you can afford the monthly payment now, you’ll be able to afford it twenty years from now.
º Dividends–Whole life plans pay these out while term policies don’t.
º Benefits–You get a living benefit from a whole life insurance policy that builds cash value. With term, you get only the death benefit.
Which Option is Best
While term is good for individuals who truly can’t afford to buy more coverage, they should switch to a whole life plan as soon as they can. With a whole life policy, they don’t have to buy a new policy because it doesn’t expire. Even better, if they choose to convert to a whole life policy from a term, they may not need to undergo a medical exam.