Unless you’re independently wealthy, people who depend on you would suffer financially if you were to die. That’s why they invented life insurance. You’re going to have to make a few basic decisions before you start shopping for life insurance quotes. First is what type of life insurance policy is best for your circumstances and needs.
Life insurance companies package life insurance policies with lots of different names, but there are essentially two choices. You can choose permanent life insurance, also called whole life insurance, or the typically more affordable term life insurance. Permanent, or whole life, insurance coverage lasts as long as you do, as long as you continue to pay the premiums. When you go, your beneficiaries receive the death benefits spelled out in your life insurance policy.
Permanent life insurance policies typically accrue cash value over time, which you can actually draw on or be reimbursed for if you decide to cancel the policy. The specifics will vary depending on your whole life insurance coverage provider. Whole life insurance policies serve as source of savings, but historically they haven’t
proven to be the highest yielding investment vehicle. They are, however, secure savings. So if that’s important to you, you might want to consider a whole life insurance policy as part of your investment portfolio.
Term life insurance policies are issued to cover a set period, or term, of time. If you die during that period, your beneficiaries collect the face value of the policy. But when time’s up, so is the policy. You may be able to renew it, but term life insurance has no cash value. Which is why term life insurance is usually the most affordable insurance option for most people.
You’ve probably seen plenty of TV commercials for cheap life insurance requiring no health exam. Those are term life insurance policies. Don’t let the cheesiness put you off from considering this type of policy. Term life insurance is an affordable life insurance choice if you need to make sure your spouse can pay off the mortgage or send the kids to college for four years. The older you get, the more you’ll pay for term life insurance.