Life insurance is for the living. It is a financial investment in your loved ones and in your own future. The earlier you purchase it, the faster it builds cash value that can be wisely invested to build your life or handle emergencies. If you have a family, the investment ensures that your death will not leave them floundering. Here’s what you need to know when you start to look at purchasing or enhancing your life insurance coverage.
Four Key Players: The insurer, the owner, the insured, and the beneficiary are the four bodies of importance in life insurance coverage. The insurer is the company that distributes benefits, the owner pays the premiums, the insured is whose life the policy covers, and the beneficiary is who or what will receive any benefits paid out. The owner and insured can be the same person. The beneficiary can be a person, persons, or entities like a trust.
Two Primary Forms: Term life is the most common form of insurance, costs the least, and is the most broadly suited to most people. The insurance provider is banking on the insured living for a set term, generally 10, 20, or 30 years. Premiums remain stable for the duration of the term and rise dramatically after. Permanent life insurance builds a cash value over time as you pay into it that can be borrowed against. Within the umbrella of permanent life insurance, you can acquire:
- Whole Life – which has an investment portion similar to bonds or CDs.
- Variable Life – which has investment options like a mutual fund.
- Universal Life – Which has a lower premium, higher risk, and higher interest rate.
Coverage and costs associated with life insurance can vary dramatically and depends highly on the unique needs of the individual. Contact Benefit Insurance Services today to discuss your options and find your optimal coverage option.