Investing in life insurance is an important step when it comes to planning for the future. However, with multiple options available to choose from, determining which policy will best suit your needs is usually challenging. The following guide offers an introduction to the main types of life insurance so that you can move forward with peace of mind.
3 Types of Life Insurance
These life insurance policies are meant to last for a specified length of time, so they won’t accumulate cash value during this period. If you pass away while the policy is active, your beneficiaries will receive the benefits outlined in your plan, but if you outlive the term, it will expire. Since it’s only available for a temporary period, term life insurance is sometimes cost-effective, and, upon purchasing the policy, you’ll lock in a specified rate, which will dictate your annual or monthly premiums. If you have children and only want to cover them until they’re adults, this is likely the best option for you.
As the name implies, this life insurance provides coverage for your entire life. These policies offer a guaranteed interest rate, premium, and death benefit, and they accumulate cash value throughout your lifetime. This means a percentage of each premium is entered into a savings account, which grows on a tax-deferred basis. Many parents opt to purchase this policy for their children while they’re young so they can ensure the kids will have an affordable policy once they get older.
Similar to whole policies, universal life insurance lasts until you pass, and it offers both death benefits and cash accumulation, but the major difference is that the latter is flexible. However, in this case, you can decide what percentage of your premium goes toward your savings. In most cases, this option is ideal for younger policyholders that might not want to withhold a substantial amount now, but anticipate wanting to change the percentage down the line.
If you need help determining which kind of life insurance policy will best suit your needs, turn to the team at Southern Insurance Associates in Hixson, TN. With over 70 carriers and a history dating back to 1910, they have the resources and expertise needed to find the perfect coverage for you. Visit their website to learn more about their options, and call (423) 296-0626 to request a quote.