It’s an exciting process to buy life insurance. It may not seem like it at first. However, when you realize that you are taking steps to protect your family, it is well worth it. The key is to make this first purchase of life insurance the right one for your family. It’s best to work closely with your agent to compare policy options and plans. Let’s consider a few key areas here.
Whole and Term Life Insurance Options
The first step is to consider the type of policy for your needs. Take a look at the two most common options (though each one has multiple sub-options available).
Term Life Insurance
This type of life insurance is in place for a set number of years. You can usually choose options from 10 years to 30, depending on your age and health. Term policies may be a bit lower costing, with rates more affordable to those who are younger and healthy.
Term policies can be a very good investment if you want to cover specific goals, such as providing your loved ones with enough money to pay off the mortgage. It can also be a good option if you have children and just want coverage that is in place until your children are adults.
Whole Life Insurance
The goal of whole life is to remain in place for your lifetime. As such, it can provide a more permanent solution for your family. Whole life works well when you want to leave behind money no matter when you die, even if you are very old. As long as your policy remains in place, you can do that.
Costs depend on your age and health. There are also some policies that can help you build up a cash value, which you can cash in on during your lifetime. This policy may be a benefit if you are hoping to build your wealth or borrow from your policy during your lifetime.
Which one is right for you? To figure that out, work with your life insurance agent to understand your goals. Ask for quotes for several forms. Talk about the features and limitations of each. Then, talk to your loved ones about their wishes and needs. You may also want to consider your estate planning goals and other retirement vehicles you have. All of this information can help you make the right decisions about which type of life insurance is best.