Life insurance can provide security for a family’s financial future, by ensuring that funds are available to cover expenses, in the event of the death of a family member.
The funds may help offset initial costs such as extended medical bills and burial, as well as ongoing financial responsibilities, like mortgage balances and outstanding debts. An optimal life insurance policy will also provide enough financial support for the surviving family members to maintain a comfortable living.
There are a number of types of life insurance policies, that can be chosen, depending upon one’s needs.
Term Life Insurance is a low-cost means of providing various levels of coverage for one’s family and other beneficiaries. Policies can be purchased for different time periods, such as 10, 15 or 20 years. The policy will expire without any coverage if the insured outlives the term of the policy. Premiums for this type of policy do not change during the term. In general, term life insurance provides the highest protection for the costs incurred.
A Universal Life Insurance policy features the greatest flexibility. The insured can decide the amount and frequency of payments. Essentially, the higher the amount paid, the less time it will take to provide full coverage. Premiums for this type of policy cover the insurance amount and investment expenses required to keep the policy in force.
A Whole Life Insurance policy provides protection during the life of the insured, from the issuance of the policy to the date of death of the insured, provided the premiums are fully paid. The amount of the premium is set at the time of issuance and remains level for the life of the policy. Unlike term life insurance, whole life insurance provides protection and builds cash value over the life of the policy. The accumulated cash value can be used as hardship to offset the cost of a mortgage balance or childrens’ education, or be cancelled to access the the cash surrender value.