To make sure you get the right coverage for a fair cost, it is important to understand what to look for when purchasing a life insurance policy.
Purchasing a life insurance policy can be overwhelming, which is why we wanted to share some of the things you should know when buying life insurance.
Life insurance doesn’t have to be expensive. The cost of your insurance will depend on the type you want: Term Life Insurance, Whole Life Insurance, or Universal Life Insurance. Youngs Insurance can give you a free life insurance quote so you have an idea of what you would pay.
All life insurance offers you protection, but not all types have a savings component. It is important to consider your options. Term Life Insurance is simply life insurance protection. Whole Life Insurance builds up a guaranteed cash value in the policy that you can borrow against. Universal Life Insurance has an investment component as well as an insurance component. The investments provide flexibility in the premium payments, death benefits, and savings element. If you have Term Life Insurance, you still have the option of investing your savings elsewhere.
In the case of death, your beneficiaries do not pay tax on the life insurance payout. If your estate is the beneficiary the death benefit is still tax-free, but it is subject to probate fees.
Only Term policies have a renewal date. For example, a Term 10 policy renews every 10 years, Term 20 renews every 20 years, etc. Rates are based on your attained age at the time of renewal and account for a potential deterioration of health. If you have Term 100 life insurance, the cost is the same for life. If you have a “convertible” term insurance policy, the policy can be converted into a permanent policy with locked in rates that will never increase any time before age 65.