Life insurance guarantees that your loved ones are taken care of when you are no longer here to provide for them. It also allows you to designate a beneficiary to receive your property and other assets. But, to choose the proper insurance policy, there are two definitions you need to know.

Term Life

When purchasing a term life insurance, you must first select a term, such as 10-year, 20-year or even 30-year. If you were to pass away during that time, your loved ones would end up receiving the full amount of the policy. Individuals who live past the plan’s maturity date don’t receive anything, and the policy is canceled. Therefore, all the money paid during that period is lost. If you want to continue coverage, you must purchase another policy.  

Whole Life

If you are looking for a guaranteed payout for your loved ones, whole life insurance is likely the best option. With this policy, you make annual payments that stay consistent from one year to the next. Every payment then boosts the monetary value that you can draw out of the policy. If you ever needed cash in a pinch, you can also withdraw from the policy without paying a penalty or fee.

For those who don’t need to take the cash out of the policy, you can always add it to the plan’s total value. You can always cancel the policy and receive whatever the cash value is at that point, but your coverage will be voided.

Planning for the future is crucial. Spend some time speaking with the life insurance agent to determine what policy is going to work the best for your financial needs. Tammy Ross Insurance in Monroe, NC, for example, offers life insurance, car insurance, renters insurance and more. You can visit the esteemed agency online or call (704) 223-4981.