Finding the right life insurance policy can be a crucial step for many to ensure their loved ones will be financially covered after their passing. After you have passed, your life insurance policy will provide your loved ones with a coverage amount, commonly referred to as a death benefit, that can help cover many end-of-life costs, day-to-day expenses, and other debts.
Before deciding which policy may be right for you and your loved ones, let’s go over some of the most common life insurance policies available.
Universal life insurance is a permanent life insurance policy. This permanent policy will provide you with lifelong coverage and never expire, provide your beneficiaries with a death benefit after your passing, and provide only you with a cash value component that will earn interest based on the current market.
A universal policy is also flexible, allowing policyholders to adjust their death benefit and premium payments.
Whole life insurance, which is also a permanent policy, provides coverage for as long as you continue to pay your premiums. Not only will it provide lifelong coverage, these policies will also build cash value that can be accessed by you, the policyholder, by withdrawing or borrowing against it. These life insurance policies also have a death benefit that will be paid out to your beneficiaries once you have passed, but your beneficiaries will not have access to the cash value of your policy.
Compared to universal life, these policies are also not as flexible. You will have a fixed premium and death benefit.
A term life policy will only provide coverage for a specific amount of time, which can be 10, 20, or even 30 years. You will agree to pay the insurance company a premium each month to be covered for the set length of your policy. If you die while still in the set term of your policy, your beneficiaries will receive the death benefit. If your policy ends and you do not renew it or convert it to a permanent policy, you will no longer be covered and your beneficiaries will not receive a death benefit upon your death.
If you do not qualify for one of the above traditional life insurance policies due to health or age reasons, you may be eligible for a final expense policy. These are small, permanent whole life policies that only provide up to $50,000 as a death benefit and are designed to provide coverage for end-of-life costs, such as funeral expenses.
However, these policies are much easier to qualify for as they do not require a medical exam like traditional life policies do.
At Owens & Owens Consulting, we will help you go over your many life insurance options so you can make an informed decision on which policy would work best for you and your loved ones. To learn more about your options, reach out to us today at 866-222-5419.
