September is life insurance awareness month! And since the latest stats indicate that nearly 50% of consumers age 25 to 64 do not have life insurance coverage, we figured that now is the perfect time to get the conversation started.
If others depend on you for financial support, part of your financial plan should include how you will provide for them in the event of your death. Purchasing a life insurance policy is a safety net that ensures your loved one’s future financial obligations are met, covering items such as funeral costs, outstanding debt, estate taxes and everyday living expenses.
There are two basic types of life insurance: term life insurance and permanent life insurance. The type of life insurance policy that best suits you will depend on your unique needs.
To help you decide, here are the basics:
OPTION #1: TERM LIFE INSURANCE
Just as its name implies, term life insurance covers you for a specific period of time, or term, that you choose. Since it offers a death benefit but no cash value, term life insurance is an inexpensive way to protect your beneficiaries for a specified period of time.
It is ideal for those who have a temporary need for life insurance protection, for those who need a large amount of insurance protection but have limited cash or for those with specific business needs, such as additional coverage for a key employee.
OPTION #2: WHOLE LIFE INSURANCE
Whole life is the most basic type of permanent life insurance. It provides coverage that lasts a lifetime and also builds up a cash value that you can borrow against, withdraw or use to pay future premiums.
A life insurance policy with a cash value is ideal for those who have a lifetime need for insurance protection, prefer stable premiums over the life of the policy, want a policy that allows them to build tax-deferred values, and value the high degree of coverage the policy affords. While rates for a whole life insurance policy remain stable over the life of the policy, premiums are initially more costly than for term insurance.
If you would like to have a comprehensive review of your life insurance needs, send a quick email to firstname.lastname@example.org with the subject, “Life Insurance Review,” and our life insurance specialist will get back to you right away!