If you haven’t built up a significant financial buffer, you’ll need life insurance to protect your loved ones should you suddenly pass. Unfortunately, there is a lot of misinformation about life insurance, such as how much coverage you need and what kind of policy you should get. Use the following guide to familiarize yourself with the facts.

3 Facts About Life Insurance

How Much Coverage You Need

It’s crucial to secure the right amount of coverage for your family. While the funds you leave behind will never equate to the value of your life, the policy will provide for your loved ones and take care of the obligations associated with your death. While many sources recommend insuring your life for 10 times your salary, the exact amount may vary from one person to the next. Ideally, your insurance should cover the funeral expenses as well as any unsecured debt.

Term vs. Cash Value Policies

There are two types of insurance policies: term and cash value. Term life insurance covers you for a specific number of years, such as 10 or 20. If you die during this time, the insurance company will pay. Otherwise, your coverage ends with the conclusion of the term. In contrast, a cash value policy insures your life unless you stop paying premiums. It includes a savings mechanism that pays out at the end.

Factors That Affect the Cost of Life Insurance

Term insurance is cheaper than cash value policies. However, the monthly premium also depends on the individual being insured. The insurance company will sell you a contract that specifies when they are required to pay out. They’ll take certain risk factors into account to determine the cost of the premium. The more risk factors that apply, the more you’ll pay. For example, a 50-year-old smoker will pay more than a 20-year-old non-smoker.

If you don’t have a life insurance policy in place, talk to an agent as soon as possible. Ebert Agency has been providing coverage solutions in Foley, AL, since 1928. This family-owned company also offers auto and homeowners insurance policies to provide you with the comprehensive plan you need. Visit the website to learn more, or call (251) 943-2281 to get a quote.