Consider All Your Options

When shopping for life insurance, it is important to understand your options. Different forms of life insurance will offer you a range of benefits and different levels of return for your dollar. There are several basic types of life insurance, from “whole” to “universal” to “term” life insurance. The differences between these types of life insurance policies range from minute to significant As an example,one of the most important differences that sets “term” life insurance apart from the others is that it is often the most affordable form of life insurance. Understanding the details between the types of life insurance will help explain why (the costs vary).

“Whole” life insurance is one of the most expensive forms of life insurance. This is because “whole” life offers both a death and cash benefit. This means that part of your premium goes towards a savings program. This savings program either earns interest or  is allocated to an investment plan. It is worth noting that you have no control on how the money is invested if this is the path you choose. While this makes the price of whole life insurance much more expensive than term life insurance, it often provides a larger benefit than a “term” policy.

“Universal Life” policies fall somewhere between “whole” life and “term” insurance. You have more flexibility with a “universal” policy. You can use the accumulated earnings of your cash benefit to cover parts of your premium costs. You can also vary the amount of the death benefit payout. Having this flexibility results in higher administrative fees, and thus higher premiums. While the premiums for “universal” life are usually less than those of “whole” life, it is still not as affordable as “term” life insurance premiums.

“Term” life insurance provides a straight death benefit. This means that your premiums will go directly to the amount of coverage you selected when you initially purchased your policy. Premiums from a “term” life insurance is the lowest of all form of life insurance for this reason. For the value of “term” life insurance, families can insure that they are covered while still staying on budget.

It is important for every family to be covered with a life insurance policy. It helps protect their loved ones against financial hardships. Like any major purchase, you should compare your options when purchasing life insurance. Different policies will have different pros and cons that must be considered, and will be influenced by different risk factors. By using an independent “term” life insurance agency, like SelectQuote, you can compare different life insurance companies and policies to find the best policy to fit your budget and lifestyle.

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