It’s hard at first to understand all of the different life insurance plans, varieties, and carriers available in the life insurance marketplace. So it’s important to do your own research but also reach out to advisors and agents who work in the industry on a daily basis so that you find the best policy for your needs and family.
There are a couple different types of life insurance currently sold by life insurance companies. We can help you determine what kind of life insurance you should buy. I will briefly explain each type that we offer but you may want to have a one on one discussion with us. We welcome that and you can call us at 1-800-712-8519 to ask any questions you have or use the quote box to the left of this page.
Really only two types of life insurance, term and permanent, are available but there are many varieties of the two. Most are most familiar with term life insurance. We offer both term insurance and permanent insurance. It really depends on your personal situation as to what you should buy.
When you’re shopping around for coverage, one of the main decisions you’ll have to make is which type to buy. You could easily spend hours of researching looking at each type and the benefits of it. Hopefully, this article will save you time.
What Kind of Life Insurance Should I Buy?
We will usually recommend term life insurance to cover items like a mortgage on your home, your other debts, and educational expenses for your children. These are temporary issues and will eventually go away. Many times we use permanent life insurance to cover items like income replacement, retirement income for a spouse and even to use as a supplemental retirement savings plan. We discuss using permanent life insurance such as indexed universal life as a supplemental retirement vehicle in other articles on this blog. These are just a few things to consider when deciding on what policy to purchase. Just keep in mind that you can’t go wrong starting with term life insurance. You can always change as long as you are healthy. Term life insurance is a nice low cost way to get covered. Just remember, term insurance is a temporary solution but can cover some large ticket items like a mortgage or college cost. But if you aren’t healthy such as someone needing term life quotes for people with heart disease, you can still get coverage.
The most common policy term life insurance. Term life insurance is usually designed to provide coverage for a certain period of time. For example, 5 years, 10 years, 15 years, 20 years, 25 years and 30 years. The premium is typically guaranteed for the length of the term period. So for instance if you were to purchase a 20 year term policy from XYZ company for $30.00 per month, your premiums would remain $30.00 per month for 20 years. Term insurance is the simplest type of insurance to understand. Term life insurance can also be the least expensive to own. You can get a quick quote using the calculator to the left. Just realize that term is temporary and if you plan to keep the insurance past the term length you will need to convert it to a permanent policy or pay a much higher renewal premium.
An alternative to a term life insurance policy is a no exam plan. These policies don’t require a medical exam to get coverage, but you still have to go through the rest of the application process. With these no exam plan, the insurance company is still going to pull your medical records and ask you a health questions and review your family history. These plans are more expensive and don’t allow you to get more than $500,000 of coverage in most cases.
Permanent Life Insurance is just what it says – permanent. That means you are insuring your life forever. The premiums are usually higher than term insurance but your insurance will last forever as long as you are paying the premium. Permanent life insurance also builds up cash value that can be accessed in the form of loans against the policy or if you surrender the policy. We will discuss in depth the different types of permanent life insurance in future articles, this is meant to be a general discussion on the types of life insurance to help guide you.
There are various types of permanent life insurance policies. You may have heard of universal life insurance, variable universal life insurance, Indexed universal life insurance and whole life insurance to name a few. Each of these work on the same principal but with different cash value accumulation engines. We will get more in depth in future articles. Please call us or complete the contact us form if you would like some a one on one consultation.
For an immediate fix for your life insurance needs, term life insurance is a great solution. We suggest that you choose term life insurance from a company that has good conversion options. You may need to keep the insurance longer than the policy term length. If you were to become uninsurable during the term period, you might not be able to get a new term policy. That would mean in order to keep the policy you would have to pay a much higher premium after the original term period or you could convert to a permanent policy.
Guaranteed acceptance life insurance is a sub-type of term life insurance. With guaranteed acceptance life insurance, you don’t have to take the medical exam and you won’t have to answer any of the health questions. This is by-far the easiest and quickest way to get life insurance coverage. With these policies, you just answer a handful of questions, and then you’ll be rewarded with a life insurance policy. While these policies seem like the best option, it will cost more and probably won’t allow you to get the amount of protection your family needs.
As you can see, there are several different advantages to each type of policy that you’ll have to weigh in light of your specific insurance needs and preferences. Aside from picking the right policy type, it’s vital that you purchase enough coverage, regardless of the type you choose. If your policy were too small, your loved ones will still have debts and bills to pay, but no money left over to pay for those. Not let your debts burden your family if you were to pass away.
Now the hard part comes when you need to decide the amount of life insurance you want to purchase. Use our tips to give you a nice direction on where to start.
One of the most important factors to calculate is your debts and any unpaid expenses that your loved ones would be responsible for after your passing. The primary goal of life insurance is to pay off those expenses and to prevent your family members from being left with thousands of dollars of debt. Make sure that your coverage is large enough to pay off all of those final expenses.
Another factor to consider is your household income, or salary. If the insured passes away then their salary will be removed from the household income. So it will need to be replaced by a portion of your life insurance benefit. Some suggest taking the insureds salary and add anywhere between 5-10 years worth of it to the face value of the policy. This will give the survivors time to replace or get used to a different standard of living.
Without a thorough fact finding questionnaire, it is impossible to say which type of life insurance you should purchase because the kind of coverage that’s right for you depends on your personal circumstances and financial goals. We often suggest, a combination of term and permanent insurance might be the right solution. Don’t just listen to the advice of people you see on TV, such as Dave Ramsey’s life insurance advice or Suze Orman on Life Insurance, we can personally help guide you with this decision and structure the plan that is right for you and your family.
If you have questions about the different kind of life insurance plans on the market, we can help you answer those questions and bring the best plans directly to you. We aren’t a standard insurance company which only works with one single carrier. We are allowed to sell plans from dozens of companies and can provide you with the information and quotes you need to cover your family.
Just give us a call at 1-800-712-8519 or