Life Insurance Policies
Life insurance provides the named beneficiaries of a policy with cash benefits in the event of the insured's death. There are several types of coverage available for you to choose from, and each has its unique benefits and purposes. Generally, the most common reason why this type of insurance is purchased is to provide financial support to loved ones after the insured's passing. For example, while the death benefits may be used for any purpose, they most commonly supplement lost wages, pay off a mortgage or help to pay for the children's college after the deceased is no longer able to do so.
Term life insurance is one type of coverage, and it is commonly available with a 10, 15, 20 or 30 year term. Death benefits are available throughout the length of the term provided the premium continues to be paid. However, at the end of the term, the coverage ceases. This type of coverage does not accumulate cash value like a whole life or universal policy may, but it generally is the most affordable type of insurance available. Whole life and universal life policies are more costly, but the additional premium amount is used to create cash value in the policy. The cash value may accumulate over time and may grow with interest. This cash can be withdrawn when the policy is surrendered, or the policy holder may borrow against the funds. This may be used for many financial goals, and there generally is not a loan application process that you need to qualify for to pull money out of the policy. In addition, whole life and universal policies may be life policies that never expire, or they may expire when the insured reaches a specified age, such as 95 or 100 years old.
You should be aware that the type of life coverage that you purchase will affect the premium cost. In addition, factors like the insured's age and health status at the time the policy is purchased will also affect the premium. Therefore, it is often best to purchase coverage earlier in life to receive competitive rates available.