Life insurance is a financial tool that can help you care for your loved ones should the unexpected happen. While auto insurance or health insurance provides coverage for the policyholder when something happens, life insurance provides a death benefit to beneficiaries. Most people consider a life insurance policy to help provide financial assistance to cover their final expenses, pay off debts, or help with family obligations. Determining what type of insurance policy you need and the coverage amount required will be imperative when considering coverage.
Term life insurance is a temporary policy usually valid for up to 30 years. This typically covers the period when you have a mortgage and dependent children. Your coverage is terminated at the end of the policy term, and you are left without coverage. While this is usually a cheaper option, it is not a long-term solution that some people seek.
Whole life insurance offers permanent protection ensuring that chosen beneficiaries will receive a death benefit payment no matter when it happens. With a whole life insurance policy, premiums are paid toward funding the policy’s death benefit and administrative costs. Additionally, a portion of the premiums is also put into a savings account so that policy grows a cash value over time. Depending on the policy, you can take advantage of the accrued cash value and use it to pay your premiums, or withdraw it. Whole life insurance is financial protection as well as an investment.
If you are considering a policy, you will need to get a whole life insurance quote to begin coverage. Let’s take a look at why you should consider whole life insurance.
Protection for Your Family
As discussed, a whole life policy offers a death benefit to provide for your family should the unexpected happen. Unlike term life insurance, however, whole life offers lifelong coverage. A tax-free death benefit could help pay off debts, supplement lost income, pay funeral costs, or cover other financial obligations. On average, whole life insurance products provide around $250,000 in coverage.
Your whole life policy also comes with tax-advantage benefits for your family. The payout sum will be tax-free, meaning that the amount of money is a guarantee for your family. In general, property and other aspects of your estate are impacted by taxes and could take time in probate court. Life insurance benefits are not part of that package and will be available to your family much sooner.
Retirement Funding
Depending on the policy and insurance company, your whole life policy can be used to build supplemental retirement income. As discussed, over time, the policy could accrue cash value. You can borrow against the cash value of your policy or withdraw your money if you need it later in life. Unlike other retirement savings accounts, your policy’s cash value is protected from market fluctuations. While withdrawing money from your policy will decrease the benefit to your loved ones, it is a guaranteed asset that you can rely on if needed.
Whole Life Insurance Quotes
If you are interested in whole life insurance, you will need to begin with a quote. Like buying a car or a house, you should shop around to explore all of your options and premium rates. Insurance companies consider a variety of factors when determining premium rates. Online comparison tools allow you to receive multiple offers and review all of your options to find the best policy for your needs. If you need a whole life insurance policy, you should compare several quotes.
Life insurance is a way to protect your family and ensure a secure future for them should something happen to you. Whole life could provide permanent coverage along with several other benefits. With some time and research, you can find the best policy for your family.
