It’s understandable that few people like to think about life insurance. After all, just thinking about purchasing a life insurance policy means thinking about a rather unfortunate situation: your untimely demise.
However, if you don’t take the time and effort to invest in a life insurance policy now, then if something were to happen then your family may be in a far tougher spot financially than they need to be.
By asking yourself the question of what type of life insurance should I get now, you can ensure that you’re able to provide for the ones you love even after you pass away.
To help you answer that question, we’ll use this article to explain the principal types of life insurance policies so you can figure out the best type of life insurance for your particular situation.
Term Life Insurance
The first type of life insurance is term life insurance. This particular policy is only valid for a very specific length of time, typically 20 years or less. The reason why you would want to purchase a term life insurance policy is if you are going to be in a place or position for an extended period of time that has a high mortality rate.
Let’s say, for instance, that you are for some reason forced to move to a place with significantly higher crime rates than the national averages. In combination with that, you work a particular type of construction job that, though it pays well, has a very hazardous component to it.
In this scenario, it makes sense to get a term life insurance policy, as you may not be in this high-risk position for a long amount of time. But for the duration that you are in that position, you want to ensure that a policy will provide for your family.
Permanent Life Insurance
A permanent life insurance policy is a different deal altogether. With this kind of policy, you pay into an account that is guaranteed to pay off no matter when you pass away. There is no time limit on the policy’s expiration.
Just like there are different types of home heating oil, there are different types of permanent life insurance policies.
The first is a whole life insurance policy. This has set cash values at every anniversary of the policy. The value builds over time in a very steady, structured way. If you withdraw from this policy, the value build-up is recalculated.
The second type is a universal life insurance policy, which builds interest overtime at changing interest rates that never dip below a specified threshold.
Lastly, variable universal life insurance policies allow you to invest the value that you’ve paid into the policy in the stock market. The value of the payout is determined by your portfolio’s performance.
Answer the Question: “What Type of Life Insurance Should I Get?”
Now that you know the different types of policies available to the public, you are much better equipped to answer the question, “what type of life insurance should I get?”
For more insurance advice, check out the rest of the articles on the website!