Whether you have a family that depends on you for support or a spouse, children, or business partners, life insurance will help you prepare for the unexpected. However, the mechanics of this policy can be confusing. Learn more about how it works to determine which plan is right for you.

What Are the Different Types?

Term life is the most affordable and straightforward kind of life insurance. It covers a limited time—usually between 10 and 30 years—and it can be canceled before it expires without losing any value. However, the coverage expires when your policy ends, which means you’ll need to shop for a new one later on.

Whole life doesn’t expire, so you can keep it as long as you need. Its cash value component makes it useful as part of a customized personal finance or estate planning strategy, or as a forced savings vehicle. However, whole life can be six to 10 times more expensive than term life, and the surrender value of the policy changes with time.

What Does It Cover?

Life insurance covers most causes of death, including illness, accidents, and natural causes. However, your agency may exclude cases such as suicide soon after purchasing the policy, murder of the policyholder by a listed beneficiary, or application fraud.

Typically, life insurance death benefits are given tax-free and without limitations. This gives beneficiaries the power to use them for any expenses they deem necessary, including living, education, or business costs, paying off debt, and charity.

How Are Premiums Calculated?

Rates are based on an expansive range of factors that affect life expectancy, including your age, gender, nicotine use, medical history, family health history, dangerous hobbies, planned travel, driving record, and credit history. You must be honest and thorough in your responses, as insurers verify all the information in your application and have you complete a medical exam. This usually consists of blood and urine samples and an electrocardiogram. The healthier and younger you are at the time of application, the lower your rates will likely be.

If you’re looking for a life insurance policy, North Carolina Farm Bureau Insurance® Group has you covered. Since 1953, they’ve offered a wide range of services to the residents of Charlotte and Mecklenburg counties, including car insurance, home insurance, and health insurance. Visit their website or call them at (704) 841-8700 to speak with one of their knowledgeable agents today.