Sooner or later, everyone comes to the realization that they need life insurance. But after the realization, the questions begin: how much will I need to spend to get the protection I need, where should I buy it from, what are the best companies, and what different types of insurance are there?
That’s a lot to deal with all at once. Actually, the best place to start is by figuring out what kind of life policy you should buy. There are several major categories of coverage you should know about, including whole life, term, long term care coverage, universal life and others. Before diving into the task of choosing a specific carrier or calculating what your monthly premiums might be, take the time to learn the basics.
Here are some of the most common forms of life policies that people buy, depending on their age, preferences and many other factors:
These simple policies ask you to make just two decisions. Once you have chosen the length of the policy and the amount of the payout upon your death. Term is one of the most popular ways to purchase a policy because the costs are low and the contracts are quite simple to understand. Keep in mind that if you outlive the expiration date, you’ll need to buy a new policy at an advanced age, which could be costly.
Long term care insurance like this site here is one of the newer kinds of life insurance and is usually listed alongside additional coverage like joint, credit, and mortgage life policies. This is the type of policy that takes care of a large portion of the expense associated with treatment in a long-term care facility. Technically not considered medical treatment, long-term care (LTC) facilities help residents with activities of daily living, like bathing, dressing and preparing meals.
One of the costlier options on this list, whole life is an easy way to get insurance that has a built-in savings feature that allows you to borrow against the cash value of the policy. It never expires and the payments never change. If you stay current on the annual premiums, your heirs will receive the predetermined payout amount.
Universal life policies are not only permanent but come with a savings feature similar to whole life. The premiums are usually on the low side, but if you miss a monthly payment, you might have to forfeit your insurance. There are several varieties of universal life but most include some sort of savings feature as well as very reasonable payments.
The insurance industry is diverse. That’s why you’ll often hear of other kinds of life policies that are designed for certain purposes, like paying off a home mortgage or a personal loan. There are also contracts written that cover “death and dismemberment” that results from an accident. If you think you need one of these special kinds of coverage, speak with an agent and compare rates before buying.