If you’re interested in life insurance, it is important to understand that there are different types of policies, so you need to think about your needs and your situation carefully so that you make the right choice. The options can be confusing, but having the right information will make the selection process easier, and doing your research will allow you to make an informed decision.
Permanent and term are two types of life insurances that are available, and the following information will help with your decision:
Term Life Insurance
This option should be considered if you need life insurance for a specific period of time. This type of insurance would allow you to match the length of the term policy to the length that you need. For example, if you have kids and want to secure funds to pay for their future college education, you could buy a 20 year term life insurance to help in this regard.
You can also consider term life insurance if you need a large amount of life insurance but have a tight budget. Generally, this type of insurance would pay only if you were to die during the term of the policy, so the rate for death benefits would be lower than the rates offered for permanent life insurance policies. If you are still alive when the term comes to an end, the coverage would stop unless the policy is renewed or a new one is purchased.
Permanent Life Insurance
This is the option to choose if you need life insurance for as long as you live, and this type of coverage would pay a death benefit regardless of whether you die tomorrow or 50 years from now. You can also consider this option if you are interested in accumulating savings that will grow on a tax-deferred basis, which could be a source of borrowed funds for a variety of different purposes. The savings can be used to pay the premiums to keep your life insurance in force if you are unable to pay them through other means or the savings can be used for another purpose of your choosing. You would be able to borrow these funds even if your credit is not great, and the death benefit would be used as collateral for the loan, meaning if you were to die before it’s repaid, the insurance company would collect what is due to them before paying anything out to the beneficiary.
Premiums for permanent policies are usually higher than for term insurance but this premium will remain the same regardless of your age, whereas the premium in a term life insurance policy can increase substantially every time it gets renewed.
dropdead can provide you with more information regarding this very important matter. We can further discuss the details of term life insurance and can provide you with competitive life insurance quotes, so if you are looking for peace of mind, give us a call today!